Bank of New York Mellon v. Romewright Properties LLC, et al

Filing 33

ORDER. IT IS HEREBY ORDERED, ADJUDGED, and DECREED that 13 BNYM's motion for partial summary judgment be, and the same hereby is, DENIED. Signed by Judge James C. Mahan on 7/5/17. (Copies have been distributed pursuant to the NEF - ADR)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 DISTRICT OF NEVADA 6 *** 7 THE BANK OF NEW YORK MELLON, 8 Plaintiff(s), 9 10 Case No. 2:17-CV-116 JCM (CWH) ORDER v. ROMWRIGHT PROPERTIES LLC, et al., 11 Defendant(s). 12 13 Presently before the court is plaintiff Bank of New York Mellon’s (“BNYM”) motion for 14 partial summary judgment. (ECF No. 13). Defendant Romewright Properties LLC (“RP”) (ECF 15 No. 23) and defendant Regent at Town Centre Homeowners’ Association (the “HOA”) (ECF No. 16 24) filed responses, to which BNYM replied (ECF No. 27). 17 I. Facts 18 This case involves a dispute over real property located at 6955 North Durango Drive, Unit 19 #2092, Las Vegas, NV 89149 (the “property”). Zachary Lovenson obtained a loan in the amount 20 of $106,050.00 to purchase the property, which was secured by a deed of trust recorded on 21 September 2, 2005. (ECF No. 1). 22 On December 13, 2011, defendant Nevada Association Services, Inc. (“NAS”), acting on 23 behalf of the HOA, recorded a notice of delinquent assessment lien. (ECF No. 1). On January 1, 24 2012, NAS recorded a notice of default and election to sell to satisfy the delinquent assessment 25 lien. (ECF No. 1). 26 27 28 James C. Mahan U.S. District Judge The deed of trust was assigned to BNYM via a corporate assignment of deed of trust recorded September 5, 2013. (ECF No. 1). 1 On August 26, 2014, NAS recorded a notice of trustee’s sale on the HOA’s lien. (ECF No. 2 1). On September 19, 2014, defendants RP and Dry Dog LLC (“DD”) purchased the property at 3 the foreclosure sale for $59,000.00. (ECF No. 1). A trustee’s deed upon sale in favor of RP and 4 DD was recorded on September 22, 2014. (ECF No. 1). 5 On January 12, 2017, BNYM filed the underlying complaint, alleging two causes of action: 6 (1) quiet title/declaratory judgment against all defendants; and (2) conversion against NAS and the 7 HOA. (ECF No. 1). 8 In the instant motion, BNYM moves for partial summary judgment on its quiet title claim 9 pursuant to Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016), 10 cert. denied, No. 16-1208, 2017 WL 1300223 (U.S. June 26, 2017) (“Bourne Valley”). (ECF No. 11 13). 12 II. Legal Standard 13 The Federal Rules of Civil Procedure allow summary judgment when the pleadings, 14 depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, 15 show that “there is no genuine dispute as to any material fact and the movant is entitled to a 16 judgment as a matter of law.” Fed. R. Civ. P. 56(a). A principal purpose of summary judgment is 17 “to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 18 323–24 (1986). 19 For purposes of summary judgment, disputed factual issues should be construed in favor 20 of the non-moving party. Lujan v. Nat’l Wildlife Fed., 497 U.S. 871, 888 (1990). However, to be 21 entitled to a denial of summary judgment, the nonmoving party must “set forth specific facts 22 showing that there is a genuine issue for trial.” Id. 23 In determining summary judgment, a court applies a burden-shifting analysis. The moving 24 party must first satisfy its initial burden. “When the party moving for summary judgment would 25 bear the burden of proof at trial, it must come forward with evidence which would entitle it to a 26 directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has 27 the initial burden of establishing the absence of a genuine issue of fact on each issue material to 28 James C. Mahan U.S. District Judge -2- 1 its case.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) 2 (citations omitted). 3 By contrast, when the nonmoving party bears the burden of proving the claim or defense, 4 the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential 5 element of the non-moving party’s case; or (2) by demonstrating that the nonmoving party failed 6 to make a showing sufficient to establish an element essential to that party’s case on which that 7 party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323–24. If the moving 8 party fails to meet its initial burden, summary judgment must be denied and the court need not 9 consider the nonmoving party’s evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159– 10 60 (1970). 11 If the moving party satisfies its initial burden, the burden then shifts to the opposing party 12 to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith 13 Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the 14 opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient 15 that “the claimed factual dispute be shown to require a jury or judge to resolve the parties’ differing 16 versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 17 631 (9th Cir. 1987). 18 In other words, the nonmoving party cannot avoid summary judgment by relying solely on 19 conclusory allegations that are unsupported by factual data. See Taylor v. List, 880 F.2d 1040, 20 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the 21 pleadings and set forth specific facts by producing competent evidence that shows a genuine issue 22 for trial. See Celotex, 477 U.S. at 324. 23 At summary judgment, a court’s function is not to weigh the evidence and determine the 24 truth, but to determine whether there is a genuine issue for trial. See Anderson v. Liberty Lobby, 25 Inc., 477 U.S. 242, 249 (1986). The evidence of the nonmovant is “to be believed, and all 26 justifiable inferences are to be drawn in his favor.” Id. at 255. But if the evidence of the 27 nonmoving party is merely colorable or is not significantly probative, summary judgment may be 28 granted. See id. at 249–50. James C. Mahan U.S. District Judge -3- 1 III. Discussion 2 In the instant motion, BNYM argues that judgment in its favor on its quiet title claim is 3 proper pursuant to Bourne Valley. (ECF No. 13). BNYM sets forth no argument as to how Bourne 4 Valley applies to its case. Rather, BNYM merely cites to Bourne Valley and concludes that 5 judgment is proper based thereon. 6 Under Nevada law, “[a]n action may be brought by any person against another who claims 7 an estate or interest in real property, adverse to the person bringing the action for the purpose of 8 determining such adverse claim.” Nev. Rev. Stat. § 40.010. “A plea to quiet title does not require 9 any particular elements, but each party must plead and prove his or her own claim to the property 10 in question and a plaintiff’s right to relief therefore depends on superiority of title.” Chapman v. 11 Deutsche Bank Nat’l Trust Co., 302 P.3d 1103, 1106 (Nev. 2013) (citations and internal quotation 12 marks omitted). Therefore, for plaintiff to succeed on its quiet title action, it needs to show that 13 its claim to the property is superior to all others. See also Breliant v. Preferred Equities Corp., 14 918 P.2d 314, 318 (Nev. 1996) (“In a quiet title action, the burden of proof rests with the plaintiff 15 to prove good title in himself.”). 16 Section 116.3116(1) of the Nevada Revised Statutes gives an HOA a lien on its 17 homeowners’ residences for unpaid assessments and fines; moreover, NRS 116.3116(2) gives 18 priority to that HOA lien over all other liens and encumbrances with limited exceptions—such as 19 “[a] first security interest on the unit recorded before the date on which the assessment sought to 20 be enforced became delinquent.” Nev. Rev. Stat. § 116.3116(2)(b). 21 The statute then carves out a partial exception to subparagraph (2)(b)’s exception for first 22 security interests. See Nev. Rev. Stat. § 116.3116(2). In SFR Investment Pool 1 v. U.S. Bank, the 23 Nevada Supreme Court provided the following explanation: 24 25 26 27 As to first deeds of trust, NRS 116.3116(2) thus splits an HOA lien into two pieces, a superpriority piece and a subpriority piece. The superpriority piece, consisting of the last nine months of unpaid HOA dues and maintenance and nuisance-abatement charges, is “prior to” a first deed of trust. The subpriority piece, consisting of all other HOA fees or assessments, is subordinate to a first deed of trust. 334 P.3d 408, 411 (Nev. 2014) (“SFR Investments”). 28 James C. Mahan U.S. District Judge -4- 1 Chapter 116 of the Nevada Revised Statutes permits an HOA to enforce its superpriority 2 lien by nonjudicial foreclosure sale. Id. at 415. Thus, “NRS 116.3116(2) provides an HOA a true 3 superpriority lien, proper foreclosure of which will extinguish a first deed of trust.” Id. at 419; see 4 also Nev. Rev. Stat. § 116.31162(1) (providing that “the association may foreclose its lien by sale” 5 upon compliance with the statutory notice and timing rules). 6 7 8 9 10 Subsection (1) of NRS 116.31166 provides that the recitals in a deed made pursuant to NRS 116.31164 of the following are conclusive proof of the matters recited: (a) Default, the mailing of the notice of delinquent assessment, and the recording of the notice of default and election to sell; (b) The elapsing of the 90 days; and (c) The giving of notice of sale[.] Nev. Rev. Stat. § 116.31166(1)(a)–(c).1 “The ‘conclusive’ recitals concern default, notice, and 11 publication of the [notice of sale], all statutory prerequisites to a valid HOA lien foreclosure sale 12 as stated in NRS 116.31162 through NRS 116.31164, the sections that immediately precede and 13 give context to NRS 116.31166.” Shadow Wood Homeowners Assoc. v. N.Y. Cmty. Bancorp., Inc., 14 15 366 P.3d 1105 (Nev. 2016) (“Shadow Wood”). Nevertheless, courts retain the equitable authority to consider quiet title actions when a HOA’s foreclosure deed contains statutorily conclusive 16 recitals. See id. at 1112. 17 18 19 20 1 The statute further provides as follows: 21 22 23 24 2. Such a deed containing those recitals is conclusive against the unit's former owner, his or her heirs and assigns, and all other persons. The receipt for the purchase money contained in such a deed is sufficient to discharge the purchaser from obligation to see to the proper application of the purchase money. 25 26 27 3. The sale of a unit pursuant to NRS 116.31162, 116.31163 and 116.31164 vests in the purchaser the title of the unit’s owner without equity or right of redemption. 28 Nev. Rev. Stat. § 116.31166(2)–(3). James C. Mahan U.S. District Judge -5- 1 BNYM has attached the trustee’s deed upon sale in favor of RP and DD. (ECF No. 13-7). 2 The recitals therein are conclusive as to all statutory prerequisites to a valid HOA lien foreclosure 3 sale. 4 In light of the foregoing, the court will deny BNYM’s motion for partial summary 5 judgment (ECF No. 13) as BNYM has failed to show that it is entitled to judgment as a matter of 6 law on its quiet title claim. 7 IV. Conclusion 8 Accordingly, 9 IT IS HEREBY ORDERED, ADJUDGED, and DECREED that BNYM’s motion for 10 11 12 13 partial summary judgment (ECF No. 13) be, and the same hereby is, DENIED. DATED July 5, 2017. __________________________________________ UNITED STATES DISTRICT JUDGE 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 James C. Mahan U.S. District Judge -6-

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