LVDG Series 125 established under LVDG, LLC, a Nevada series limited liability company v. Welles et al

Filing 62

ORDERED that LVDG's motion for leave to file amended complaint (ECF No. 59 ) is GRANTED. FURTHER ORDERED that LVDG shall have ten (10) days from entry of this order to file the proposed amended complaint attached as Exhibit 1 to their motion for leave to file an amended complaint (ECF No. 59 , Exhibit 1). Signed by Judge Larry R. Hicks on 7/20/2016. (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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***
LVDG SERIES 125, established under
LVDG LLC, a Nevada series limitedliability company,
Plaintiff,

ORDER
v.

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3:13-cv-00503-LRH-WGC

HAROLD M. WELLES; VALERIE M.
WELLES; WELLS FARGO BANK, N.A.;
and MTC FINANCIAL INC. d/b/a
TRUSTEE CORPS,
Defendants.

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Before the court is Plaintiff/Counter-Defendant LVDG Series 125’s (“LVDG”)

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motion for leave to file an amended complaint. ECF No. 59. Defendant/Counter-

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Claimant Wells Fargo Bank, N.A. filed a notice of non-opposition. ECF No. 61.

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Defendants Harold M. Welles, Valerie M. Welles, and MTC Financial Inc. (collectively

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“Defendants”) did not file any opposition to the motion.

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I.

Facts and Procedural History
In May 1999, defendants Harold M. Welles and Valerie M. Welles (“the Welles”)

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purchased real property in Reno, Nevada, at 1125 Tule Drive (“the property”). On or

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about November 15, 2006, the Welles executed a deed of trust in favor of defendant

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Wells Fargo.

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Several years later, on January 12, 2010, a notice of delinquent assessment for

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homeowner’s association (“HOA”) dues was recorded on the property. On June 29,

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2010, a notice of default and election to sell under the HOA lien was recorded.

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Eventually, on or about August 15, 2013, LVDG purchased the property at an HOA

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foreclosure sale. On the same date of the HOA foreclosure sale, Wells Fargo and MTC

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Financial Inc. (“MTC”) recorded a separate Notice of Trustee’s Sale, scheduling a

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foreclosure sale to take place on September 20, 2013.
Subsequently, on August 23, 2013, LVDG filed a complaint to quiet title against

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defendants alleging that its purchase of the property at the HOA sale extinguished all

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other liens, including Wells Fargo’s first deed of trust. ECF No. 1, Exhibit A. In response,

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Wells Fargo filed a motion to dismiss (ECF No. 4) which was granted by the court (ECF

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No. 32). LVDG appealed that order to the Ninth Circuit. ECF No. 42. While the appeal

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was pending, the Nevada Supreme Court issued its decision in SFR Investments Pool

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1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014). In SFR Investments, the court

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held that an HOA has a true super-priority lien on a property for nine months of unpaid

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assessments, and foreclosure on this lien extinguishes all other interests in a property.

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SFR Invs. Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014). After the Nevada

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Supreme Court’s decision in SFR Investments, the Ninth Circuit reversed this court’s

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order granting Wells Fargo’s motion to dismiss and remanded the action back to this

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court.

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Nevertheless, on November 1, 2013, while the underlying action was pending,

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Wells Fargo conducted its own foreclosure sale on the property. Federal Home Loan

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Mortgage Corporation (“Freddie Mac”) purportedly purchased the property at the bank

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foreclosure sale. In response, LVDG filed the present motion to amend its complaint in

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order to name Freddie Mac as a defendant and allege various new claims related to

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Wells Fargo’s foreclosure sale. ECF No. 59.

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II.

Discussion

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A party may amend its pleadings by leave of court. Fed. R. Civ. P. 15(a)(2).

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Leave of court to amend should be freely given when justice so requires and when there

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is no undue delay, bad faith, or dilatory motive on the part of the moving party. See

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Wright v. Incline Village General Imp. Dist., 597 F.Supp.2d 1191 (D. Nev. 2009); DCD

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Programs, LTD v. Leighton, 883 F.2d 183 (9th Cir. 1987).

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Here, the court has reviewed the documents and pleadings on file in this matter

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and finds that good cause exists to grant LVDG’s motion for leave to file an amended

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complaint. First, LVDG has attached the proposed amended complaint in accordance

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with Local Rule 15-1(a). See ECF No. 59, Exhibit 1. Second, the court finds that there is

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no undue delay, bad faith, or dilatory motive on behalf of LVDG in requesting leave to

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amend its complaint. Third, it would prejudice LVDG to deny the motion because Wells

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Fargo’s foreclosure sale had not occurred at the time LVDG’s original complaint was

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filed. Therefore, the court shall grant LVDG’s motion for leave to file an amended

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complaint.

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IT IS THEREFORE ORDERED that LVDG’s motion for leave to file amended
complaint (ECF No. 59) is GRANTED.
IT IS FURTHER ORDERED that LVDG shall have ten (10) days from entry of

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this order to file the proposed amended complaint attached as Exhibit 1 to their motion

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for leave to file an amended complaint (ECF No. 59, Exhibit 1).

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IT IS SO ORDERED.

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DATED this 20th day of July, 2016.

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LARRY R. HICKS
UNITED STATES DISTRICT JUDGE