US Bank National Association, as Trustee for the Specialty Underwriting and Residential Finance Trust Mortgage Loan Asset-Backed Certificates Series 2006-BC4 v. Woodland Village et al

Filing 45

ORDERED that the Motion to Dismiss (ECF No. 39 ) is GRANTED. IT IS FURTHER ORDERED that the Motion for Summary Judgment (ECF No. 42 ) isDENIED as moot.The Clerk of the Court shall enter judgment against Plaintiff and close the case. Signed by Judge Robert C. Jones on 6/14/2017. (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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U.S. BANK NATIONAL ASSOCIATION,

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Plaintiff,

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3:16-cv-00501-RCJ-WGC

vs.
ORDER

WOODLAND VILLAGE et al.,

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Defendants.

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This case arises from a residential foreclosure by the Woodland Village Homeowners

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Association (“the HOA”) for failure to pay HOA fees. Pending before the Court is Defendant

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Thunder Properties, Inc.’s (“Thunder”) Motion to Dismiss, (ECF No. 39), and Plaintiff’s Motion

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for Summary Judgment, (ECF No. 42).

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I.

FACTS AND PROCEDURAL BACKGROUND
In 2006, non-party homeowners obtained a $212,672 mortgage loan to purchase property

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located at 17655 Little Peak Court, Cold Springs, Nevada 89508 (the “Property”). Plaintiff U.S.

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Bank (“Plaintiff”) acquired the note and Deed of Trust (“DOT”) by Corporate Assignment of

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Deed of Trust recorded July 24, 2009. (Compl. ¶ 15, ECF No. 1.)

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On February 17, 2010, as a result of the homeowners’ failure to pay HOA fees, the HOA

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recorded a lien for delinquent assessment. (Id. at ¶ 16.) The HOA later foreclosed, and on

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February 10, 2011, the HOA acquired the Property with a credit bid of $5,562.25. (Id. at ¶¶ 25–

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26.) The deed of sale was recorded on February 10, 2011. Subsequently, the HOA transferred its

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interest in the Property to Defendant Westland Real Estate Development and Investments

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(“Westland”) by way of quitclaim deed recorded April 30, 2013. (Id. at ¶ 27.) Westland then

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transferred its interest in the Property to Defendant Thunder by way of quitclaim deed recorded

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August 26, 2013. (Id. at ¶ 28.) The chain of title indicates that Thunder is the current owner of

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the Property.
On August 25, 2016, Plaintiff brought this action for quiet title and declaratory relief,

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violation of NRS 116.1113, wrongful foreclosure, and injunctive relief. On December 6, 2016,

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the Court dismissed all of Plaintiff’s Complaint save its quiet title/declaratory judgment claim

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against Westland and Thunder. (Order, ECF No. 32.) Thunder now moves the Court to dismiss

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the remaining claim against it. (Mot. Dismiss, ECF No. 39.) Plaintiff also moves for summary

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judgment in its favor. (Mot. Summ. J., ECF No. 42.)

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II.

LEGAL STANDARDS

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Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the

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claim showing that the pleader is entitled to relief” in order to “give the defendant fair notice of

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what the . . . claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47

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(1957). Federal Rule of Civil Procedure 12(b)(6) mandates that a court dismiss a cause of action

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that fails to state a claim upon which relief can be granted. A motion to dismiss under Rule

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12(b)(6) tests the complaint’s sufficiency. See N. Star Int’l v. Ariz. Corp. Comm’n, 720

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F.2d 578, 581 (9th Cir. 1983). When considering a motion to dismiss under Rule 12(b)(6) for

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failure to state a claim, dismissal is appropriate only when the complaint does not give the

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defendant fair notice of a legally cognizable claim and the grounds on which it rests. See Bell

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Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering whether the complaint is

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sufficient to state a claim, the court will take all material allegations as true and construe them in

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the light most favorable to the plaintiff. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th

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Cir. 1986). The court, however, is not required to accept as true allegations that are merely

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conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden

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State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

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A formulaic recitation of a cause of action with conclusory allegations is not sufficient; a

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plaintiff must plead facts pertaining to his own case making a violation “plausible,” not just

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“possible.” Ashcroft v. Iqbal, 556 U.S. 662, 677–79 (2009) (citing Twombly, 550 U.S. at 556)

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(“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to

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draw the reasonable inference that the defendant is liable for the misconduct alleged.”). That is,

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under the modern interpretation of Rule 8(a), a plaintiff must not only specify or imply a

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cognizable cause of action (Conley review), but also must allege the facts of his case so that the

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court can determine whether the plaintiff has any basis for relief under the cause of action he has

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specified or implied, assuming the facts are as he alleges (Twombly-Iqbal review).

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“Generally, a district court may not consider any material beyond the pleadings in ruling

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on a Rule 12(b)(6) motion. However, material which is properly submitted as part of the

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complaint may be considered on a motion to dismiss.” Hal Roach Studios, Inc. v. Richard Feiner

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& Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citation omitted). Similarly, “documents

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whose contents are alleged in a complaint and whose authenticity no party questions, but which

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are not physically attached to the pleading, may be considered in ruling on a Rule 12(b)(6)

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motion to dismiss” without converting the motion to dismiss into a motion for summary

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judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Moreover, under Federal Rule

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of Evidence 201, a court may take judicial notice of “matters of public record.” Mack v. S. Bay

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Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if the district court

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considers materials outside of the pleadings, the motion to dismiss is converted into a motion for

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summary judgment. See Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir.

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2001).

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III.

ANALYSIS

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As the Court previously held in its order of dismissal on December 6, 2016, a five-year

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statute of limitations applies to Plaintiff’s quiet title claims and the limitations period began to

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run at the time of the foreclosure sale. (Order 6, ECF No. 32.) See also Weeping Hollow Ave. Tr.

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v. Spencer, 831 F.3d 1110, 1114 (9th Cir. 2016) (emphasis added) (“Under Nevada law, Spencer

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could have brought claims challenging the HOA foreclosure sale within five years of the sale.”);

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Scott v. Mortg. Elec. Registration Sys., Inc., 605 F. App’x 598, 600 (9th Cir. 2015); Bank of Am.,

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N.A. v. Antelope Homeowners’ Ass’n, No. 2:16-cv-449, 2017 WL 421652, at *3 (D. Nev. Jan.

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30, 2017) (Mahan, J.); Nationstar Mortg. LLC v. Amber Hills II Homeowners Ass’n, No. 2:15-

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cv-01433, 2016 WL 1298108, at *3 (D. Nev. Mar. 31, 2016) (Gordon, J.). The Court dismissed

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the quiet title claim with respect to Defendants the HOA and Phil Frink, but declined to dismiss

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the claim against Westland and Thunder because they had not moved for dismissal and they

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acquired their interest in the Property within the five-year statute of limitations period.

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It is clear from the Complaint that Plaintiff alleges no independent defect in the

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assignments to Westland and Thunder other than the invalidity of the underlying HOA

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foreclosure sale. Therefore, because Plaintiff seeks to quiet title in itself on the basis of the sale,

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which took place more than five years prior to the filing of the Complaint, its claim is time-

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barred. A contrary ruling would defeat the purpose of the statute of limitations, essentially

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“restarting” the running of the statute each time a subsequent assignment of the Property was

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recorded. As the Court noted in its prior order, Plaintiff’s interest in the Property was called into

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question at the time of the foreclosure sale due to NRS 116.3116(2), which gives priority to that

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portion of an HOA lien consisting solely of unpaid HOA assessments accrued during the “nine

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months immediately preceding institution of an action to enforce the lien.” A foreclosure deed

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was recorded on February 10, 2011, and clearly stated that the grantee had purchased all right,

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title, and interest of the current vested owner. Plaintiff could have brought its action to quiet title

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against the HOA at any time following the HOA’s foreclosure sale, in order to obtain a

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declaration that the sale had not extinguished its interest in the Property.

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Therefore, the Court will dismiss Plaintiff’s quiet title claim as pled against Westland and
Thunder. The claim for injunctive relief is also dismissed as moot.
CONCLUSION

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IT IS HEREBY ORDERED that the Motion to Dismiss (ECF No. 39) is GRANTED.

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IT IS FURTHER ORDERED that the Motion for Summary Judgment (ECF No. 42) is

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DENIED as moot.

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The Clerk of the Court shall enter judgment against Plaintiff and close the case.

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IT IS SO ORDERED. June 14, 2017

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_____________________________________
ROBERT C. JONES
United States District Judge

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