Bank of America, N.A. v. Legend Trails Homeowners' Association et al

Filing 46

ORDER granting ECF No. 28 Motion for Summary Judgment; giving Plaintiff 14 days to submit proposed form of judgment or a notice of intent to prosecute remaining claims. Signed by Judge Robert C. Jones on 5/24/2017. (Copies have been distributed pursuant to the NEF - KR)

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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.,
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Plaintiff,
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vs.
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LEGEND TRAILS HOMEOWNERS’
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ASSOCIATION et al.,
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Defendants.
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3:16-cv-00203-RCJ-WGC
ORDER

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This case arises out of a homeowners’ association (“HOA”) foreclosure sale. Pending

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before the Court is a motion for summary judgment.

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I.

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FACTS AND PROCEDURAL HISTORY
On or about November 1, 2005, Graham M. and Sonja J. Leonard gave Plaintiff Bank of

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America, N.A. (“BOA”) a $372,600 promissory note (“the Note”) in exchange for proceeds in

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that amount to purchase real property at 15505 Legend View Ct., Reno, Nevada, 89511 (“the

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Property”), as well as a first deed of trust (“the DOT”) against the Property. (See Compl. ¶¶ 8,

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14, ECF No. 1). Defendant Legend Trails Homeowners’ Association (“the HOA”), through its

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agent Defendant Alessi & Koenig, LLC (“Alessi”), conducted an HOA foreclosure sale of the

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Property, selling it to Defendant LVDG LLC Series 126 (“LVDG 126”) on August 15, 2013 for

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$18,153.00. (Id. ¶¶ 2, 15–28). On May 16, 2013, however, BOA had tendered a check to the

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HOA through Alessi for $1,755, which equaled nine months’ worth of common assessments for
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the Property. (Id. ¶ 26). LVDG 126 conveyed its interest in the Property to Defendant Thunder

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Properties, Inc. (“Thunder”) on July 22, 2015. (Id. ¶¶ 2, 29).

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BOA sued the HOA, Alessi, LVDG 126, and Thunder in this Court for: (1) quiet title (the

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HOA, LVDG 126, and Thunder); (2) violation of NRS section (“NRS”) 116.1113 (the HOA and

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Alessi); and (3) wrongful foreclosure (the HOA and Alessi). 1 BOA has moved for offensive

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summary judgment.

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II.

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SUMMARY JUDGMENT STANDARDS
A court must grant summary judgment when “the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.

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Civ. P. 56(a). Material facts are those which may affect the outcome of the case. See Anderson

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v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if

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there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See

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id. A principal purpose of summary judgment is “to isolate and dispose of factually unsupported

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claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986).

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In determining summary judgment, a court uses a burden-shifting scheme. 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.” C.A.R. Transp. Brokerage Co. v.

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Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citation and internal quotation marks

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omitted). In contrast, when the nonmoving party bears the burden of proving the claim or

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defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate

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1 The fourth claim for injunctive relief against Thunder is not an independent cause of action but
a prayer for relief based on the quiet title claim, and no motion for preliminary injunctive relief
has been filed.
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an essential element of the nonmoving party’s case; or (2) by demonstrating that the nonmoving

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party failed to make a showing sufficient to establish an element essential to that party’s case on

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which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323–24.

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If the moving party fails to meet its initial burden, summary judgment must be denied and

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the court needn’t consider the nonmoving party’s evidence. See Adickes v. S.H. Kress & Co., 398

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U.S. 144 (1970). If the moving party meets its initial burden, the burden then shifts to the

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nonmoving party to establish a genuine issue of material fact. See Matsushita Elec. Indus. Co. v.

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Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute,

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the nonmoving party need not establish a material issue of fact conclusively in its favor. It is

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sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the

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parties’ differing versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors

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Ass’n, 809 F.2d 626, 631 (9th Cir. 1987). In other words, the nonmoving party cannot avoid

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summary judgment by relying solely on conclusory allegations unsupported by facts. See Taylor

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v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the

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assertions and allegations of the pleadings and set forth specific facts by producing competent

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evidence that shows a genuine issue for trial. See Fed. R. Civ. P. 56(e); Celotex Corp., 477 U.S.

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at 324.

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At the summary judgment stage, a court’s function is not to weigh the evidence and

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determine the truth, but to determine whether there is a genuine issue for trial. See Anderson, 477

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U.S. at 249. The evidence of the nonmovant is “to be believed, and all justifiable inferences are

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to be drawn in his favor.” Id. at 255. But if the evidence of the nonmoving party is merely

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colorable or is not significantly probative, summary judgment may be granted. See id. at 249–50.

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Notably, facts are only viewed in the light most favorable to the nonmoving party where there is

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a genuine dispute about those facts. Scott v. Harris, 550 U.S. 372, 380 (2007). That is, even
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where the underlying claim contains a reasonableness test, where a party’s evidence is so clearly

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contradicted by the record as a whole that no reasonable jury could believe it, “a court should not

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adopt that version of the facts for purposes of ruling on a motion for summary judgment.” Id.

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III.

ANALYSIS
The Court grants offensive summary judgment to BOA for two independent reasons.

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First, Chapter 116’s opt-in notice scheme is facially unconstitutional under the Due Process

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Clause of the Fourteenth Amendment, Bourne Valley Court Tr. v. Wells Fargo Bank, N.A., 832

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F.3d 1154, 1160 (9th Cir. 2016), and Defendants have adduced no evidence of constitutionally

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reasonable notice of the HOA sale to BOA, but only publication, which is constitutionally

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insufficient, Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 798 (1983). Second, BOA has

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adduced unrebutted evidence that it tendered $1,755 (nine months’ of assessments at $195 per

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month) to Alessi before the sale but that Alessi wrongfully rejected the tender. (See Ex. F, ECF

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No. 28-6). The superpriority piece of the HOA’s lien was therefore extinguished before the

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HOA sale, the HOA proceeded on the subpriority piece of the lien, and the DOT, being senior to

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the subpriority piece of the lien, survived the sale. See, e.g., US Bank, N.A. v. SFR Invs. Pool 1,

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LLC, No. 3:15-cv-241, 2016 WL 4473427, at *6–8 & nn.2–3 (D. Nev. Aug. 24, 2016) (Jones, J.).

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Nor are LVDG 126 or Thunder bona fide purchasers for value. See, e.g., id. at *9–10 & nn.4–5.
Unless BOA wishes to further pursue a declaration under Shadow Wood Homeowners

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Assoc., Inc. v. N.Y. Cmty. Bancorp., Inc., 366 P.3d 1105 (Nev. 2016) or Levers v. Rio King Land

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& Inv. Co., 560 P.2d 917 (Nev. 1977), or wishes to pursue its claims under NRS 116.1113 or the

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common law of wrongful foreclosure for the purposes of obtaining damages, there appears to be

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nothing left to determine in this case.

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CONCLUSION

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IT IS HEREBY ORDERED that the Motion for Summary Judgment (ECF No. 28) is

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GRANTED. Within fourteen (14) days, Plaintiff shall submit either a proposed form of

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judgment or a notice of its intent to prosecute the remaining claims.

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IT IS SO ORDERED.

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DATED: 5th 24th day of 2017.
Dated this Thisday of May,May, 2017.

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_____________________________________
ROBERT C. JONES
United States District Judge

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