Springland Village Homeowners Association v. Pearman et al

Filing 34

ORDER that Fannie Mae's Motions for Summary Judgment in the Lead Case, 3:16-cv-00423 ECF No. 28 and Member Case, 3:16-cv-00520 ECF No. 17 are granted; Clerk directed to enter judgment in favor of Fannie Mae on all claims and counterclaims and close both cases. Signed by Judge Miranda M. Du on 1/10/2018. (Copies have been distributed pursuant to the NEF - KW)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 DISTRICT OF NEVADA 6 *** 7 8 SPRINGLAND VILLAGE HOMEOWNERS ASSOCIATION, a Nevada Non-Profit Cooperative Corporation, Lead Case, No. 3:16-cv-00423-MMD-WGC 9 Plaintiff, v. 10 11 JENNIE M. PEARMAN, et al,, and Defendants. 12 13 14 FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiff, 15 16 ORDER v. DWIGHT CARLSON, 17 18 Member Case, No. 3:16-cv-00520-MMD-WGC Defendant, And related counterclaims. 19 20 I. SUMMARY 21 Pending before this Court is Federal National Mortgage Association’s (“Fannie 22 Mae”) motion for summary judgment in two related cases.1 (Lead Case, ECF No. 28; 23 Member Case, ECF No. 17.)2 In the Member Case, Pyramid Tribe filed a response (ECF 24 25 26 27 28 same motion was filed in case no. 3:16-cv-00423-MMD-WGC (“Lead Case”) and case no. 3:16-cv-00520-MMD-WGC (“Member Case”). 2The motion for summary judgment in the Member Case was terminated when these cases were consolidated on January 5, 2018. (Member Case, ECF No. 25.) Because the motion deals with the counterclaims in the Member Case, the Court still addresses the motion as it pertains to the Member Case. 1The 1 No. 18), and Fannie Mae filed a reply (ECF No. 24). No response was filed in the Lead 2 Case. For the following reasons, Fannie Mae’s motion is granted. 3 II. BACKGROUND 4 Defendant Dwight Carlson as Trustee for Pyramid Tribe TR-116 (“Pyramid Tribe”) 5 purchased property (“Property”) at a homeowner association foreclosure sale (“HOA 6 Sale”), which it contends extinguished a deed of trust (“DOT”) then encumbering the 7 Property. (Main Case, ECF No. 28 at 2.) At the time of the HOA Sale, Fannie Mae 8 owned a loan secured by the Property and was the record beneficiary of the associated 9 DOT. (Id.) In Fannie Mae’s motion for summary judgment, it contends that (1) the 10 foreclosure sale could not have extinguished the deed of trust due to the effect of 12 11 U.S.C. § 4617(j)(3) (“Federal Foreclosure Bar”) and (2) that Pyramid Tribe’s claims for 12 unjust enrichment and equitable mortgage fail. (Lead Case, ECF No. 28 at 9-14; 13 Member Case, ECF No. 17 at 9-14.) 14 III. LEGAL STANDARD 15 “The purpose of summary judgment is to avoid unnecessary trials when there is 16 no dispute as to the facts before the court.” Nw. Motorcycle Ass’n v. U.S. Dep’t of Agric., 17 18 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is appropriate when the 18 pleadings, the discovery and disclosure materials on file, and any affidavits “show that 19 there is no genuine issue as to any material fact and that the moving party is entitled to a 20 judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An 21 issue is “genuine” if there is a sufficient evidentiary basis on which a reasonable fact- 22 finder could find for the nonmoving party and a dispute is “material” if it could affect the 23 outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 24 242, 248 (1986). Where reasonable minds could differ on the material facts at issue, 25 however, summary judgment is not appropriate. See id. at 250-51. “The amount of 26 evidence necessary to raise a genuine issue of material fact is enough ‘to require a jury 27 or judge to resolve the parties’ differing versions of the truth at trial.’” Aydin Corp. v. Loral 28 Corp., 718 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat’l Bank v. Cities Serv. Co., 391 2 1 U.S. 253, 288-89 (1968)). In evaluating a summary judgment motion, a court views all 2 facts and draws all inferences in the light most favorable to the nonmoving party. Kaiser 3 Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986). 4 The moving party bears the burden of showing that there are no genuine issues 5 of material fact. Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). Once 6 the moving party satisfies Rule 56’s requirements, the burden shifts to the party resisting 7 the motion to “set forth specific facts showing that there is a genuine issue for trial.” 8 Anderson, 477 U.S. at 256. The nonmoving party “may not rely on denials in the 9 pleadings but must produce specific evidence, through affidavits or admissible discovery 10 material, to show that the dispute exists,” Bhan v. NME Hosps., Inc., 929 F.2d 1404, 11 1409 (9th Cir. 1991), and “must do more than simply show that there is some 12 metaphysical doubt as to the material facts.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 13 783 (9th Cir. 2002) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 14 574, 586 (1986)). “The mere existence of a scintilla of evidence in support of the 15 plaintiff’s position will be insufficient.” Anderson, 477 U.S. at 252. 16 IV. DISCUSSION 17 Fannie Mae contends that the Federal Foreclosure Bar protects its DOT such that 18 the DOT still encumbers the Property. Fannie Mae further contends that Pyramid Tribe’s 19 counterclaims fail as a matter of law. 20 A. Federal Foreclosure Bar 21 The Federal Foreclosure Bar prohibits nonconsensual foreclosure of Federal 22 Housing Finance Agency (“FHFA”) assets. Berezovsky v. Moniz, 869 F.3d 923, 925 (9th 23 Cir. 2017). As a result, the Federal Foreclosure Bar generally protects Fannie Mae’s 24 property 25 /// 26 /// 27 /// 28 /// interests from extinguishment 3 if Fannie Mae was under FHFA’s 1 conservatorship, possessed an enforceable property interest at the time of the HOA 2 Sale, and did not consent3 to such extinguishment. See id. at 933. 3 Here, it is undisputed that Fannie Mae was placed into conservatorship under 4 FHFA in September 2008 and did not consent to the HOA Sale extinguishing or 5 foreclosing Fannie Mae’s interest in the Property. (Main Case, ECF No. 28 at 4, 6.) 6 Fannie Mae acquired an enforceable property interest in the Property on June 24, 2014, 7 and continued to hold that interest at the time of the HOA Sale on January 22, 2016. (Id. 8 at 5.) This is amply demonstrated in both the public record and Fannie Mae’s business 9 records. (See ECF No. 28-5 at 2; ECF No. 28-2 at 2-4; ECF No. 28-3 at 2-14). 10 The Court finds that the Federal Foreclosure Bar protected Fannie Mae’s DOT 11 from extinguishment given that Fannie Mae held an enforceable interest in the Property 12 at the time of the HOA Sale, was under the conservatorship of FHFA at the time of the 13 HOA Sale, and did not consent to the HOA Sale extinguishing or foreclosing Fannie 14 Mae’s interest in the Property. Accordingly, the HOA Sale did not extinguish Fannie 15 Mae’s interest in the Property, and the DOT therefore continues to encumber the 16 Property. 17 B. 18 Fannie Mae contends that Pyramid Tribe has failed to allege any specific facts to 19 support its counterclaims. (Related Case, ECF No. 17 at 13-14.) The Court agrees. 20 While Pyramid Tribe initially alleged that it expended funds and resources in connection 21 with the acquisition and maintenance of the Property (purportedly giving rise to unjust 22 23 24 25 26 27 28 Pyramid Tribe’s Counterclaims 3Pyramid Tribe argues that FHFA’s consent is not required because Fannie Mae purchased the loan in 2006, prior to the Federal Foreclosure Bar’s enactment (Member Case, ECF No. 18 at 4-5), but the date Fannie Mae purchased the loan is irrelevant to the inquiry under Berezovsky. Indeed, the Ninth Circuit Court of Appeals considered similar facts in Berezovsky. There, the original borrowers’ mortgage was secured by a deed of trust recorded on March 5, 2007, prior to the Federal Foreclosure Bar’s enactment, but the Federal Foreclosure Bar still protected Freddie Mac’s deed of trust from extinguishment. Berezovsky, 869 F.3d at 926, 933. Pyramid Tribe also argues that the Court should avoid considering 12 U.S.C. § 1825(b)(2) in its analysis. (ECF No. 18 at 5-7.) The Court need not address this argument as the Court considers the issues presented in this case under 12 U.S.C. § 4617(j)(3). 4 1 enrichment and equitable mortgage claims) (Member Case, ECF No. 11 at 5-6), Pyramid 2 Tribe has failed to support these conclusory statements with allegations describing the 3 expenditures. Accordingly, Fannie Mae has carried its burden of showing no genuine 4 issue of material fact exists as to the unjust enrichment and equitable mortgage 5 counterclaims. See Nissan Fire & Marine Ins. Co. v. Fritz Cos., Inc., 210 F.3d 1099, 6 1102 (9th Cir. 2000) (“In order to carry its burden of production, the moving party must 7 either produce evidence negating an essential element of the nonmoving party’s claim or 8 defense or show that the nonmoving party does not have enough evidence of an 9 essential element to carry its ultimate burden of persuasion at trial.”); see also Anderson 10 v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986) (“[A] party opposing a properly 11 supported motion for summary judgment may not rest upon mere allegation or denials of 12 his pleading, but must set forth specific facts showing that there is a genuine issue for 13 trial.”). 14 V. CONCLUSION 15 The Court notes that the parties made several arguments and cited to several 16 cases not discussed above. The Court has reviewed these arguments and cases and 17 determines that they do not warrant discussion as they do not affect the outcome of 18 Fannie Mae’s motions. 19 It is therefore ordered that Fannie Mae’s Motions for Summary Judgment in the 20 Lead Case, 3:16-cv-00423 (ECF No. 28) and Member Case, 3:16-cv-00520 (ECF No. 21 17) are granted. The Court finds that the HOA Sale did not extinguish Fannie Mae’s 22 interest in the Property and the DOT continues to encumber the Property. 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// 5 1 2 3 The Clerk is instructed to enter judgment in favor of Fannie Mae on all claims and counterclaims4 and close both cases. DATED this 10th day of January 2018. 4 5 MIRANDA DU UNITED STATES DISTRICT JUDGE 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4Pyramid Tribe only asserted counterclaims in the Related Case. (Related Case, ECF No. 11 at 5-6.) 6

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