Bank of New York Mellon v. Romewright Properties LLC, et al
Filing
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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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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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THE BANK OF NEW YORK MELLON,
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Plaintiff(s),
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Case No. 2:17-CV-116 JCM (CWH)
ORDER
v.
ROMWRIGHT PROPERTIES LLC, et al.,
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Defendant(s).
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Presently before the court is plaintiff Bank of New York Mellon’s (“BNYM”) motion for
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partial summary judgment. (ECF No. 13). Defendant Romewright Properties LLC (“RP”) (ECF
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No. 23) and defendant Regent at Town Centre Homeowners’ Association (the “HOA”) (ECF No.
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24) filed responses, to which BNYM replied (ECF No. 27).
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I.
Facts
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This case involves a dispute over real property located at 6955 North Durango Drive, Unit
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#2092, Las Vegas, NV 89149 (the “property”). Zachary Lovenson obtained a loan in the amount
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of $106,050.00 to purchase the property, which was secured by a deed of trust recorded on
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September 2, 2005. (ECF No. 1).
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On December 13, 2011, defendant Nevada Association Services, Inc. (“NAS”), acting on
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behalf of the HOA, recorded a notice of delinquent assessment lien. (ECF No. 1). On January 1,
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2012, NAS recorded a notice of default and election to sell to satisfy the delinquent assessment
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lien. (ECF No. 1).
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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).
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On August 26, 2014, NAS recorded a notice of trustee’s sale on the HOA’s lien. (ECF No.
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1). On September 19, 2014, defendants RP and Dry Dog LLC (“DD”) purchased the property at
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the foreclosure sale for $59,000.00. (ECF No. 1). A trustee’s deed upon sale in favor of RP and
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DD was recorded on September 22, 2014. (ECF No. 1).
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On January 12, 2017, BNYM filed the underlying complaint, alleging two causes of action:
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(1) quiet title/declaratory judgment against all defendants; and (2) conversion against NAS and the
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HOA. (ECF No. 1).
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In the instant motion, BNYM moves for partial summary judgment on its quiet title claim
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pursuant to Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016),
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cert. denied, No. 16-1208, 2017 WL 1300223 (U.S. June 26, 2017) (“Bourne Valley”). (ECF No.
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13).
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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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James C. Mahan
U.S. District Judge
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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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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.
James C. Mahan
U.S. District Judge
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III.
Discussion
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In the instant motion, BNYM argues that judgment in its favor on its quiet title claim is
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proper pursuant to Bourne Valley. (ECF No. 13). BNYM sets forth no argument as to how Bourne
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Valley applies to its case. Rather, BNYM merely cites to Bourne Valley and concludes that
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judgment is proper based thereon.
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Under Nevada law, “[a]n action may be brought by any person against another who claims
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an estate or interest in real property, adverse to the person bringing the action for the purpose of
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determining such adverse claim.” Nev. Rev. Stat. § 40.010. “A plea to quiet title does not require
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any particular elements, but each party must plead and prove his or her own claim to the property
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in question and a plaintiff’s right to relief therefore depends on superiority of title.” Chapman v.
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Deutsche Bank Nat’l Trust Co., 302 P.3d 1103, 1106 (Nev. 2013) (citations and internal quotation
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marks omitted). Therefore, for plaintiff to succeed on its quiet title action, it needs to show that
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its claim to the property is superior to all others. See also Breliant v. Preferred Equities Corp.,
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918 P.2d 314, 318 (Nev. 1996) (“In a quiet title action, the burden of proof rests with the plaintiff
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to prove good title in himself.”).
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Section 116.3116(1) of the Nevada Revised Statutes gives an HOA a lien on its
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homeowners’ residences for unpaid assessments and fines; moreover, NRS 116.3116(2) gives
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priority to that HOA lien over all other liens and encumbrances with limited exceptions—such as
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“[a] first security interest on the unit recorded before the date on which the assessment sought to
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be enforced became delinquent.” Nev. Rev. Stat. § 116.3116(2)(b).
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The statute then carves out a partial exception to subparagraph (2)(b)’s exception for first
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security interests. See Nev. Rev. Stat. § 116.3116(2). In SFR Investment Pool 1 v. U.S. Bank, the
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Nevada Supreme Court provided the following explanation:
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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”).
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James C. Mahan
U.S. District Judge
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Chapter 116 of the Nevada Revised Statutes permits an HOA to enforce its superpriority
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lien by nonjudicial foreclosure sale. Id. at 415. Thus, “NRS 116.3116(2) provides an HOA a true
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superpriority lien, proper foreclosure of which will extinguish a first deed of trust.” Id. at 419; see
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also Nev. Rev. Stat. § 116.31162(1) (providing that “the association may foreclose its lien by sale”
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upon compliance with the statutory notice and timing rules).
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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
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publication of the [notice of sale], all statutory prerequisites to a valid HOA lien foreclosure sale
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as stated in NRS 116.31162 through NRS 116.31164, the sections that immediately precede and
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give context to NRS 116.31166.” Shadow Wood Homeowners Assoc. v. N.Y. Cmty. Bancorp., Inc.,
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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
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recitals. See id. at 1112.
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The statute further provides as follows:
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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.
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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.
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Nev. Rev. Stat. § 116.31166(2)–(3).
James C. Mahan
U.S. District Judge
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BNYM has attached the trustee’s deed upon sale in favor of RP and DD. (ECF No. 13-7).
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The recitals therein are conclusive as to all statutory prerequisites to a valid HOA lien foreclosure
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sale.
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In light of the foregoing, the court will deny BNYM’s motion for partial summary
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judgment (ECF No. 13) as BNYM has failed to show that it is entitled to judgment as a matter of
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law on its quiet title claim.
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IV.
Conclusion
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Accordingly,
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IT IS HEREBY ORDERED, ADJUDGED, and DECREED that BNYM’s motion for
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partial summary judgment (ECF No. 13) be, and the same hereby is, DENIED.
DATED July 5, 2017.
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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge
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