JPMorgan Chase Bank, N.A. v. SFR Investments Pool 1, LLC et al

Filing 40

ORDER Granting 39 Stipulation for JPMorgan Chase Bank, N.A. Leave to File First Amended Complaint. Signed by Judge James C. Mahan on 8/24/2017. (Copies have been distributed pursuant to the NEF - SLD)

Case 2:16-cv-02779-JCM-GWF Document 39 Filed 08/22/17 Page 1 of 3

1 Joel E. Tasca
Nevada Bar No. 14124
2 Russell J. Burke
Nevada Bar No. 12710
3 BALLARD SPAHR LLP
100 North City Parkway, Suite 1750
4 Las Vegas, Nevada 89106
Telephone: [phone]
5 Facsimile: [phone]
[e-mail]
6 [e-mail]
7 Attorneys for Plaintiff
8

UNITED STATES DISTRICT COURT

9

DISTRICT OF NEVADA

Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

10 JPMORGAN CHASE BANK, N.A.
11

Plaintiff,

12
13 vs.

14 SFR INVESTMENTS POOL 1, LLC, a
Nevada limited liability company; and
15 MOUNTAIN’S EDGE MASTER
ASSOCIATION, a Nevada non-profit
16 corporation.
17

Defendants.

18 SFR INVESTMENTS POOL 1, LLC., a
Nevada limited liability company,
19
20

Counter-Claimant,

21 vs.
22 JPMORGAN CHASE BANK, N.A.
23

Counter-Defendant.

24 SFR INVESTMENTS POOL 1, LLC., a
Nevada limited liability company,
25
26

Cross-Claimant,

27 vs.
28 SIU MING PANG, an individual,
DMWEST #16802333 v1

Case No. 2:16-cv-02779-JCM-GWF
STIPULATION AND ORDER FOR
LEAVE TO PERMIT JPMORGAN
CHASE BANK, N.A. TO FILE FIRST
AMENDED COMPLAINT

Case 2:16-cv-02779-JCM-GWF Document 39 Filed 08/22/17 Page 2 of 3

1

Cross-Defendant.

2
3

JPMorgan Chase Bank, N.A. (“Chase”), Mountain’s Edge Master Association

4 (“Master’s Edge”), and SFR Investments Pool 1 (“SFR”) (all parties together as the
5 “Parties”), by and through their respective counsel of record, in compliance with LR
6 7-1 and LR 15-1, hereby file this Stipulation and Order For Leave to Permit
7 JPMorgan Chase Bank, N.A. to File First Amended Complaint.

The Parties

8 stipulate to the following:
9

1.

Pursuant to the Scheduling Order (ECF No. 26), the deadline to amend

10 pleadings is September 5, 2017.
Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

11

2.

The Parties stipulate to permit Chase to file the Amended Complaint

12 attached as Exhibit A.
13

3.

Pursuant to the Amended Complaint, Chase seeks to add current non-

14 party Diamond Creek Homeowners’ Association.
15

4.

Upon information and belief, Diamond Creek Homeowners’ Association

16 is the association that conducted the foreclosure sale giving rise to this lawsuit.
17

5.

Chase’s amended pleading is not made in bad faith, not made with a

18 dilatory motive, and timely made pursuant to the Scheduling Order.
19

6.

Chase’s amended pleading satisfies the liberal amendment standard

20 codified as Fed. R. Civ. P. 15(a).

[Remainder of Page Intentionally Left Blank]

21
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DMWEST #16802333 v1

2

Case 2:16-cv-02779-JCM-GWF Document 39 Filed 08/22/17 Page 3 of 3

7.

1

Good case exists to permit Chase to file its Amended Complaint.

2 Dated: August 22, 2017.
3
4
5

Dated: August 22nd, 2017

Dated: August 22nd, 2017

Ballard Spahr LLP

Wolf, Rifkin, Shapiro, Schulman &
Rabkin, LLP

By: /s/ Russell J. Burke
6 Joel E. Tasca, Esq.
NV Bar No. 14124
7 Russell J. Burke, Esq.
NV Bar 12710
8 100 N. City Parkway, Suite 1750
Las Vegas, NV 89106
9 Attorneys for JPMorgan Chase Bank,

By: /s/ Gregory P. Kerr
Gregory P. Kerr, Esq.
NV Bar No. 10383
3556 East Russell Road, Second Floor
Las Vegas, Nevada 89120

Attorneys for Mountain’s Edge Master
Association

N.A.

Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

10 Dated: August 22nd, 2017
11 Kim Gilbert Ebron
12 By: /s/ Diana C. Ebron
Diana Cline Ebron, Esq.
13 NV Bar No. 10580
7625 Dean Martin Drive, Suite 110
14 Las Vegas, NV 89139

Attorneys for SFR Investments Pool 1,

15 LLC
16
17

ORDER

18

IT IS SO ORDERED:

19
___________________________________
UNITED STATES DISTRICT JUDGE

20
21

August 24, day
Dated this ______ 2017of ________, 2017

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DMWEST #16802333 v1

3

Case 2:16-cv-02779-JCM-GWF Document 39-1 Filed 08/22/17 Page 1 of 14

EXHIBIT A

EXHIBIT A

Case 2:16-cv-02779-JCM-GWF Document 39-1 Filed 08/22/17 Page 2 of 14

1 Joel E. Tasca
Nevada Bar No. 14124
2 Russell J. Burke
Nevada Bar No. 12710
3 BALLARD SPAHR LLP
100 North City Parkway, Suite 1750
4 Las Vegas, Nevada 89106
Telephone: [phone]
5 Facsimile: [phone]
[e-mail]
6 [e-mail]
7 Attorneys for Plaintiff
8

UNITED STATES DISTRICT COURT

9

DISTRICT OF NEVADA

Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

10 JPMORGAN CHASE BANK, N.A.
11

Plaintiff,

12
13 vs.

14 SFR INVESTMENTS POOL 1, LLC, a
Nevada limited liability company;
15 MOUNTAIN’S EDGE MASTER
ASSOCIATION, a Nevada non-profit
16 corporation; and DIAMOND CREEK
HOMEOWNERS’ ASSOCIATION, a
17 Nevada non-profit corporation.
18

Defendants.

19

SFR INVESTMENTS POOL 1, LLC., a
20 Nevada limited liability company,
21
22
23
24
25

Counter-Claimant,
vs.
JPMORGAN CHASE BANK, N.A.
Counter-Defendant.

SFR INVESTMENTS POOL 1, LLC., a
26 Nevada limited liability company,
27
28

Cross-Claimant,

DMWEST #16733853 v2

Case No. 2:16-cv-02779-JCM-GWF
AMENDED COMPLAINT

Case 2:16-cv-02779-JCM-GWF Document 39-1 Filed 08/22/17 Page 3 of 14

1 vs.
2 SIU MING PANG, an individual,
3

Cross-Defendant.

4
Plaintiff JPMorgan Chase Bank, N.A. (“Chase”), by and through its counsel of

5

6 record, Ballard Spahr LLP, hereby complains against SFR Investments Pool 1, LLC,
7 Mountain’s Edge Master Association, and Diamond Creek Homeowners’ Association
8 as follows:
I.

9

THE PARTIES, JURISDICTION, AND VENUE

1.

Chase is a national banking association headquartered in Ohio.

11
Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

10

2.

Upon information and belief, Defendant SFR Investments Pool I, LLC

12 (“SFR”) is a Nevada limited liability company, which is wholly owned by SFR
13 Funding LLC, a Delaware limited liability company, which is wholly owned by a
14 Canadian entity, Xieman LP. Xieman LP consists of partners Xieman Investments,
15 Ltd., a Canadian corporation, and John Gibson, an individual who is a citizen of
16 South Africa. See Nationstar Mortgage LLC v. Flamingo Trails No. 7 Landscape
17 Maintenance Association, Inc., et al., Case no. 2:15-cv-01268-RFB-NJK at ECF No.
18 50-1.
19

3.

Upon information and belief, Defendant Mountain’s Edge Master

20 Association (“Mountain’s Edge”) is a Nevada non-profit corporation.
21

4.

Upon information and belief, Defendant Diamond Creek Homeowners’

22 Association (“Diamond Creek Homeowners’ Association”) is a Nevada non-profit
23 corporation.
24

5.

This Court has subject matter jurisdiction over this matter pursuant to

25 28 U.S.C. § 1331 because this matter involves federal questions of constitutionality.
26

6.

This Court also has subject matter jurisdiction over this matter

27 pursuant to 28 U.S.C. § 1332(a)(3) because there is complete diversity between
28 Chase and all Defendants and the amount in controversy exceeds $75,000.
DMWEST #16733853 v2

2

Case 2:16-cv-02779-JCM-GWF Document 39-1 Filed 08/22/17 Page 4 of 14

7.

1

Venue is proper in this judicial district pursuant to 28 U.S.C. §§

2 1391(b)(1)-(2) because SFR does business in this district; a substantial part of the
3 events or omissions giving rise to these claims occurred in this district; and the
4 property that is the subject of this action is situated in this district.
8.

5

This Court has personal jurisdiction over SFR because this lawsuit

6 arises out of and is connected with SFR’s purported purchase of an interest in real
7 property located in Clark County, Nevada and, upon information and belief, SFR is
8 a Nevada limited liability company.
9.

9

This Court has personal jurisdiction over Diamond Creek Homeowners’

10 Association because this lawsuit arises out of and is connected with Diamond Creek
Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

11 Homeowners’ Association’s purported sale of an interest in real property situated in
12 Clark County, Nevada.
10.

13

This Court has personal jurisdiction over Mountain’s Edge because

14 this lawsuit arises out of and is connected with Mountain’s Edge’s involvement with
15 real property situated in Clark County, Nevada.
11.

16

Diamond Creek Homeowners’ Association and Mountain’s Edge are

17 joined as necessary parties pursuant to Fed. R. Civ. P. 19(a) even though there are
18 no causes of action alleged against either of them.
II.

19

FACTUAL BACKGROUND

20 A.

Congress Authorizes the FHA Insurance Program

21

12.

Congress created the Federal Housing Authority (“FHA”) in 1934 and

22 the FHA became part of the Department of Housing and Urban Development
23 (“HUD”) in 1965.
24

13.

Congress authorized HUD to insure privately-issued mortgages on

25 single family homes, commonly referred to as FHA insurance, to further its
26 congressional mandate to make decent housing available to all citizens. See 12
27 U.S.C. § 1709.
28
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3

Case 2:16-cv-02779-JCM-GWF Document 39-1 Filed 08/22/17 Page 5 of 14

14.

1

The congressional purpose of the FHA insurance program is to

2 encourage private lenders to extend loans to borrowers that the lenders would
3 otherwise find too risky—i.e., to insure loans that private lenders extend to low to
4 moderate income families. See 42 U.S.C. § 1441; 12 U.S.C. §§ 1701 & 1709.
5 B.

The Property and the Deed of Trust

6

15.

This action relates to the parties’ rights and interests in certain real

7 property commonly described as 9491 Bighorn Point Court, Las Vegas, Nevada
8 89178; APN # 176-21-715-040 (the “Property”). The Property is legally described as
9 follows:
10 PARCEL ONE (1):
Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

11

Lot Ninety-Nine (99) of amended final map of Mountains
Edge 112 (a common interest community) as shown by
map thereof on file in Book 124 of Plats, Page 97, in the
Office of the County Recorder, Clark County, Nevada.
Reserving therefrom a non-exclusive easement for
ingress, egress and enjoyment in and to the common
elements as delineated on said map referred to above and
further described in the declaration of covenants,
conditions, and restrictions for Mountains Edge Master
Association recorded April 14, 2003 in Book 20030414 as
Document No. 02089 and Diamond Creek Homeowners’
Association recorded August 15, 2005 in Book 20050815
as Document No. 3118 of Official Records.

12
13
14
15
16
17

18 PARCEL TWO (2):
19

A non-exclusive easement for ingress, egress and
enjoyment in and to the common elements as delineated
on said map referred to above and further described in the
declaration of covenants, conditions and restrictions for
Mountains Edge Master Association recorded April 14,
2003 in Book 20030414 as Document No. 02089 and
Diamond Creek Homeowners’ Association recorded
August 15, 2005 in Book 20050815 as Document No. 3118
of Official Records.

20
21
22
23
24

16.

On or about February 26, 2008, a deed of trust (the “Deed of Trust”),

25 securing a loan (the “Pang Loan”) was recorded as Book and Instrument number
26 20080229-001667 in the Official Records of the Clark County Recorder, showing Sui
27 Ming Pang as borrower, Universal American Mortgage Company as lender, Stewart
28
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4

Case 2:16-cv-02779-JCM-GWF Document 39-1 Filed 08/22/17 Page 6 of 14

1 Title Company as trustee, and Mortgage Electronic Registration Systems, Inc.
2 (“MERS”) as nominee.
17.

3

On or about April 24, 2012, an Assignment was recorded as Book and

4 Instrument number 20120434-0000026 in the Official Records of the Clark County
5 Recorder, assigning MERS’ interest in the Deed of Trust as nominee to Chase.
18.

6

The Pang Loan is an FHA Loan and the Deed of Trust securing the

7 Pang Loan is therefore also federally insured.
8 C.

The HOA Foreclosure and SFR’s Acquisition of the Property

9

19.

Upon information and belief, on or about June 17, 2011, Alessi &

10 Koenig, LLC (“Alessi & Koenig”), on behalf of Diamond Creek Homeowners’
Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

11 Association, recorded a Notice of Delinquent Assessment Lien (the “Diamond Creek
12 Homeowners’ Association NOA”) on the Property as Book and Instrument number
13 20110617-0001949 in the Official Records of the Clark County Recorder.
14

20.

Upon information and belief, even though Alessi & Koenig intended to

15 record the Diamond Creek Homeowners’ Association NOA on behalf of Diamond
16 Creek Homeowners’ Association, the document itself identifies Diamond Creek
17 Community Association as the lien holder.
18

21.

Upon information and belief, on or about September 8, 2011, Alessi &

19 Koenig, on behalf of Diamond Creek Homeowners’ Association, recorded a Notice of
20 Default and Election to Sell Under Homeowners’ Association Lien (the “Diamond
21 Creek Homeowners’ Association NOD”) on the Property as Book and Instrument
22 number 20110908-0001969 in the Official Records of the Clark County Recorder.
23

22.

Upon information and belief, even though Alessi & Koenig intended to

24 record the Diamond Creek Homeowners’ Association NOD on behalf of Diamond
25 Creek Homeowners’ Association, the document itself states it was recorded on
26 behalf of Diamond Creek Community Association.
27

23.

On or about September 19, 2011, Mountain’s Edge recorded a Notice of

28 Delinquent Assessment Lien (the “Mountain’s Edge NOA”) on the Property as Book
DMWEST #16733853 v2

5

Case 2:16-cv-02779-JCM-GWF Document 39-1 Filed 08/22/17 Page 7 of 14

1 and Instrument number 20110919-0001257 in the Official Records of the Clark
2 County Recorder.
24.

3

On or about January 30, 2012, Mountain’s Edge recorded a Notice of

4 Default and Election to Sell Under Homeowners’ Association Lien (the “Mountain’s
5 Edge NOD”) on the Property as Book and Instrument number 20120130-0002318 in
6 the Official Records of the Clark County Recorder.
25.

7

Upon information and belief, on or about November 5, 2012, Diamond

8 Creek Homeowners’ Association recorded a Notice of Sale (the “Diamond Creek
9 Homeowners’ Association NOS”) on the Property as Book and Instrument number
10 20111105-0001150 in the Official Records of the Clark County Recorder.
26.

Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

11

Upon information and belief, even though Alessi & Koenig intended to

12 record the Diamond Creek Homeowners’ Association NOS on behalf of Diamond
13 Creek Homeowners’ Association, the document itself identifies Diamond Creek
14 Community Association as the association that would be conducting the association
15 foreclosure sale.
27.

16

Upon information and belief, Diamond Creek Homeowners’ Association

17 conducted the foreclosure sale on the Property (the “HOA Sale”) on December 5,
18 2012.
19

28.

Upon information and belief, SFR purchased the Property for

20 approximately $3,965.54 at the HOA Sale.
21

29.

Upon information and belief, at the time of the HOA Sale, the fair

22 market value of the Property was at least $114,000.
23

30.

The sale price at the HOA Sale is grossly inadequate when compared

24 to the debt on the Pang Loan and the fair market value of the Property at the time
25 of the HOA Sale.
26

31.

Upon information and belief, on or about December 10, 2012, Alessi &

27 Koenig, on behalf of Diamond Creek Homeowners’ Association, recorded a Trustee’s
28
DMWEST #16733853 v2

6

Case 2:16-cv-02779-JCM-GWF Document 39-1 Filed 08/22/17 Page 8 of 14

1 Deed Upon Sale (the “Trustee’s Deed”) on the Property as Book and Instrument
2 number 20121210-0003657 in the Official Records of the Clark County Recorder.
3

32.

The Trustee’s Deed identifies Diamond Creek Community Association

4 as the foreclosing beneficiary.
5

33.

Upon information and belief, Alessi & Koenig mistakenly identified

6 Diamond Creek Community Association as the foreclosing beneficiary when the
7 actual foreclosing beneficiary for the HOA Sale was Diamond Creek Homeowners’
8 Association.
9

34.

The HOA Sale occurred before the Nevada Supreme Court issued its

10 decision in SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 130 Nev.____, 334 P.3d
Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

11 408 (2014).
12

35.

The HOA Sale is void, voidable, or otherwise insufficient to extinguish

13 the Deed of Trust because the sale was tainted by fraud, oppression, and/or
14 unfairness.
15

36.

Upon information and belief, neither Diamond Creek Homeowners’

16 Association nor Alessi & Koenig provided proper notice of the Diamond Creek
17 Homeowners’ Association NOA, the Diamond Creek Homeowners’ Association NOD,
18 or the Diamond Creek Homeowners’ Association NOS to Chase and/or the
19 beneficiary under the Deed of Trust.
20

37.

Neither the Diamond Creek Homeowners’ Association NOA, the

21 Diamond Creek Homeowners’ Association NOD, nor the Diamond Creek
22 Homeowners’ Association NOS identified what portion of the lien, if any,
23 constituted a “super-priority” lien.
24

38.

Neither the Diamond Creek Homeowners’ Association NOA, Diamond

25 Creek Homeowners’ Association NOD, nor the Diamond Creek Homeowners’
26 Association NOS specified whether the relevant homeowners’ association was
27 foreclosing on the “super-priority” portion of its lien, if any, or under the non-“super28 priority” portion of the lien.
DMWEST #16733853 v2

7

Case 2:16-cv-02779-JCM-GWF Document 39-1 Filed 08/22/17 Page 9 of 14

1

39.

A homeowners’ association sale conducted pursuant to NRS Chapter

2 116 must comply with all notice provisions as stated in NRS 116.31162 through
3 NRS 116.21168.
4

40.

Upon information and belief, neither Diamond Creek Homeowners’

5 Association nor Alessi & Koenig complied with all mailing and notice requirements
6 stated in NRS 116.31162 through NRS 116.31168.
7

41.

The Trustee’s Deed did not comply with NRS 116.31164(3)(a), which

8 states that “the person conducting the sale shall . . . deliver to the purchaser . . . a
9 deed without warranty which conveys to the grantee all title of the unit’s owner to
10 the unit.” See NRS 116.31164(3)(a).
Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

11

42.

The HOA Sale deprived Chase of its right to due process.

12

43.

The HOA Sale resulted in an impermissible taking of Chase’s property

13 right and/or interest.
14

44.

Upon information and belief, the current fair market value of the

15 Property is approximately $219,077.00.
16

45.

The current unpaid principal balance on the Pang Loan is $255,603.11

17

46.

Upon information and belief, SFR maintains that it has an interest in

18 the Property.
III.

19

(DECLARATORY RELIEF)

20
21

FIRST CLAIM FOR RELIEF

47.

Chase repeats and re-alleges the preceding paragraphs as though fully

22 set forth herein.
23

48.

Pursuant to NRS 40.010, this Court has the power and authority to

24 declare Chase’s rights and interests in the Property.
25

49.

The FHA-insured Deed of Trust is a first secured interest on the

26 Property.
27
28
DMWEST #16733853 v2

8

Case 2:16-cv-02779-JCM-GWF Document 39-1 Filed 08/22/17 Page 10 of 14

1

50.

Pursuant to the Supremacy Clause of the United States Constitution,

2 state laws are preempted when there is an actual conflict between state law and
3 federal law, and NRS Chapter 116 et seq. conflicts with the federal FHA program.
4

51.

Pursuant to the Supremacy Clause of the United States Constitution, a

5 state law which stands as an obstacle to the accomplishment and execution of the
6 full purposes and objectives of Congress is invalid.
7

52.

NRS Chapter 116 et seq. stands as an obstacle to the full purposes and

8 objectives of the FHA Program.
9

53.

Pursuant to the Supremacy Clause of the United States Constitution,

10 the HOA Sale could not extinguish Chase’s federally-insured Deed of Trust.
Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

11

54.

Chase is entitled to a determination from this Court, pursuant to 28

12 U.S.C. § 2201 and NRS 40.010, that the HOA Sale cannot extinguish Chase’s
13 federally-insured Deed of Trust and that any purported interest acquired by SFR
14 through the Trustee’s Deed is subject to Chase’s federally-insured Deed of Trust.
15

55.

Pursuant to the Property Clause of the United States Constitution, the

16 HOA Sale, and SFR’s subsequent interest in the Property, cannot extinguish the
17 government’s interest in the Property because only Congress has the power to
18 dispose of federal government territory or property.
19

56.

SFR claims an interest in the Property adverse to Chase.

20

57.

Diamond Creek Homeowners’ Association did not comply with NRS

21 Chapter 116, including, without limitation, providing notice of the HOA Sale to
22 Chase.
23

58.

The SFR decision does not apply retroactively, and the HOA Sale did

24 not extinguish Chase’s first position deed of trust.
25

59.

The HOA Sale is void due to the grossly inadequate sale price alone.

26

60.

The HOA Sale is void due to the inadequate sales price plus the fraud,

27 oppression, and/or unfairness that accompanied the HOA Sale.
28
DMWEST #16733853 v2

9

Case 2:16-cv-02779-JCM-GWF Document 39-1 Filed 08/22/17 Page 11 of 14

1

61.

The HOA Sale denied Chase due process protected by the Fifth and

2 Fourteenth Amendment of the United States Constitution.
3

62.

For all the reasons set forth above in the General Allegations, Chase is

4 entitled to a declaration from this Court, pursuant to NRS 40.010, that Chase’s
5 interest is superior to the interest held by Defendants, if any, and all other parties.
6

63.

Chase has furthermore been required to retain counsel and is entitled

7 to recover reasonable attorneys’ fees and costs.
IV.

8

SECOND CLAIM FOR RELIEF
(QUIET TITLE)

9
10

64.

Chase repeats and re-alleges the preceding paragraphs as though fully

Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

11 set forth herein.
12

65.

Pursuant to 28 U.S.C. § 2201 and NRS 40.010, this Court has the

13 power to resolve the adverse claims in the Property.
14

66.

The federal government had an interest in the Property due to the

15 Pang Loan and the federally-insured Deed of Trust.
16

67.

The FHA-insured Deed of Trust is a first secured interest on the

17 Property.
18

68.

Pursuant to the Supremacy Clause of the United States Constitution,

19 state laws are preempted where there is an actual conflict between state law and
20 federal law, and NRS Chapter 116 et seq. conflicts with the federal FHA Program.
21

69.

NRS Chapter 116 et seq. stands as an obstacle to the full purposes and

22 objectives of the FHA Program.
23

70.

Pursuant to the Supremacy Clause of the United States Constitution,

24 the HOA Sale could not extinguish Chase’s federally-insured Deed of Trust.
25

71.

Pursuant to the Property Clause of the United States Constitution, the

26 HOA Sale, and SFR’s subsequent interest in the Property, cannot extinguish the
27 federal government’s interest in the Property.
28
DMWEST #16733853 v2

10

Case 2:16-cv-02779-JCM-GWF Document 39-1 Filed 08/22/17 Page 12 of 14

1

72.

For all the reasons set forth above in the General Allegations, Chase is

2 entitled to a declaration from this Court, pursuant to NRS 40.010, that Chase’s
3 interest is superior to the interest held by Defendants, if any, and all other parties.
4

73.

SFR claims an interest in the Property that is adverse to Chase’s

5 interest.
6

74.

Diamond Creek Homeowners’ Association did not comply with NRS

7 Chapter 116, including, without limitation, providing notice of the HOA Sale to
8 Chase. The HOA Sale is void and should be rescinded on this basis.
9

75.

The SFR decision does not apply retroactively, and the HOA Sale did

10 not extinguish Chase’s first position Deed of Trust.
Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

11

76.

The HOA Sale is void due to the grossly inadequate sale price alone.

12

77.

The HOA Sale is void due to the inadequate sale price plus fraud,

13 oppression, and/or unfairness that accompanied the HOA Sale.
14

78.

Further, the HOA Sale is void and should be rescinded on the basis

15 that it denied Chase due process.
16

79.

Chase has furthermore been required to retain counsel and is entitled

17 to recover reasonable attorneys’ fees and costs.
V.

18

(UNJUST ENRICHMENT)

19
20

THIRD CLAIM FOR RELIEF

80.

Chase repeats and re-alleges the preceding paragraphs as though fully

21 set forth herein.
22

81.

If it is determined that Chase’s first position deed of trust has been

23 extinguished by the HOA Sale, then SFR has been unjustly enriched in that Chase
24 has continued to expend funds and resources to maintain and preserve the
25 Property, to the detriment of Chase, and contrary to the principles of fairness,
26 justice, and fair dealing.
27

82.

Chase is entitled to recoup the reasonable amount of benefits obtained

28 by SFR based on the theory of unjust enrichment.
DMWEST #16733853 v2

11

Case 2:16-cv-02779-JCM-GWF Document 39-1 Filed 08/22/17 Page 13 of 14

83.

1

Chase has furthermore been required to retain counsel and is entitled

2 to reasonable attorneys’ fees and costs.
VI.

3

PRAYER

4

Wherefore, Chase prays for judgment against Defendants as follows:

5

1.

For a declaration and determination that the HOA Sale did not

6 extinguish Chase’s interest in the Property;
2.

7

For a declaration and determination that the HOA Sale is void or

8 voidable;
3.

9

For a preliminary and permanent injunction prohibiting SFR, its

10 successors, assigns, and agents from conducting any sale, transfer, or encumbrance
Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

11 of the Property;
4.

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For a preliminary and permanent injunction requiring SFR, its

13 successors, assigns, and agents to pay all taxes, insurance, and homeowners’
14 association dues during the pendency of the action;
5.

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For a preliminary and permanent injunction requiring SFR, its

16 successors, assigns, and agents to segregate and deposit all rents generated from
17 the Property with the Court or a Court-approved trust account over which SFR has
18 no control during the pendency of the action;
6.

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If it is determined that Chase’s first position deed of trust has been

20 extinguished by the HOA Sale, for special damages in the amount of the fair market
21 value of the Property or the unpaid balance of the Pang Loan and Deed of Trust,
22 whichever is greater, together with all amounts advanced by Chase, including,
23 without limitation, amounts advanced for taxes, insurance, and maintenance of the
24 Property;
7.

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For all fees and costs of court incurred herein, including post-judgment

26 costs; and
27 ///
28 ///
DMWEST #16733853 v2

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Case 2:16-cv-02779-JCM-GWF Document 39-1 Filed 08/22/17 Page 14 of 14

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8.

For any and all further relief deemed appropriate by this Court.

2 Dated: August 22nd, 2017.
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BALLARD SPAHR LLP
By:/s/ Russell J. Burke
Joel E. Tasca
Nevada Bar No. 14124
Russell J. Burke
Nevada Bar No. 12710
BALLARD SPAHR LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106

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Attorneys for JPMorgan Chase Bank,
N.A.

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Ballard Spahr LLP
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
[phone]

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DMWEST #16733853 v2

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