Deutsche Bank National Trust Company v. Wingfield Springs Community Association et al

Filing 26

ORDER denying ECF No. 6 Motion to Dismiss for Lack of Jurisdiction. Signed by Judge Miranda M. Du on 08/14/2017. (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 9 DEUTSCHE BANK NATIONAL TRUST COMPANY, SOLELY AS TRUSTEE FOR HARBORVIEW MORTGAGE LOAN TRUSTMORTGAGE LOAN PASSTHROUGH CERTIFICATES, SERIES 2005-11, 10 13 14 15 ORDER Plaintiff, v. 11 12 Case No. 3:16-cv-00632-MMD-VPC WINGFIELD SPRINGS COMMUNITY ASSOCIATION, a Nevada non-profit corporation; WESTLAND CONSTRUCTION CORP., a Nevada corporation; THUNDER PROPERTIES INC., a Nevada corporation.; DOE INDIVIDUALS I through X; and ROE CORPORATIONS 1 through 10, 16 Defendants. 17 18 I. SUMMARY 19 This case concerns a dispute over the constitutionality of a homeowner 20 association (“HOA”) foreclosure sale. Before the Court is Defendant Thunder Properties, 21 Inc.’s (“Thunder Properties”) Motion to Dismiss for Lack of Subject Matter Jurisdiction 22 (“Motion”). (ECF No. 6.) The Court has reviewed Plaintiff Deutsche Bank National Trust 23 Company’s (“Deutsche Bank”) response (ECF No. 12) and Thunder Properties’ reply 24 (ECF No. 13). For the reasons discussed below, Thunder Properties’ Motion is denied. 25 II. BACKGROUND 26 The following facts are taken from the Complaint. (ECF No. 1.) 27 In May of 2005, Kendall Fielding and Cindi Yakimow (“Borrowers”) borrowed 28 $244,000.00 to buy a home at 2690 Lawry Drive in Sparks, Nevada (“the Property”). The 1 loan was secured by a Deed of Trust (“DOT”) on the Property. On December 12, 2012, 2 the DOT was assigned to Deutsche Bank. 3 When Borrowers became delinquent on their HOA dues, Defendant Wingfield 4 Springs Community Association (“the HOA”) recorded a lien on the Property and 5 eventually elected to sell the Property pursuant to Nevada’s HOA foreclosure statutes. 6 On May 28, 2013, the HOA purchased the Property at a non-judicial foreclosure sale for 7 $4,424.71. On January 6, 2014, the HOA conveyed its interest in the Property via 8 quitclaim deed to Defendant Westland Construction Corporation (“Westland”). On 9 February 27, 2014, Westland quitclaimed its interest in the Property to Thunder 10 Properties. 11 Amongst its other claims, Deutsche Bank seeks to quiet title pursuant to 28 U.S.C. 12 § 2201, NRS § 30.010 et seq., and NRS § 40.010, challenging the foreclosure sale as 13 statutorily defective. 14 The Complaint alleges diversity jurisdiction. (ECF No. 1 at 2.) Thunder Properties 15 seeks dismissal for lack of subject matter jurisdiction, arguing that the parties are not 16 diverse because Deutsche Bank and Thunder Properties are citizens of California. (ECF 17 No. 6 at 3.) 18 III. LEGAL STANDARD 19 Federal Rule of Civil Procedure 12(b)(1) allows a defendant to seek dismissal of 20 a claim or action for lack of subject matter jurisdiction. Dismissal under Rule 12(b)(1) is 21 appropriate if the complaint fails to allege facts that are sufficient to establish subject 22 matter jurisdiction. In re Dynamic Random Access Memory (DRAM) Antitrust Litig., 546 23 F.3d 981, 984-85 (9th Cir. 2008). Subject matter jurisdiction may be met through diversity 24 jurisdiction or federal question jurisdiction. Federal district courts have diversity 25 jurisdiction over lawsuits when the amount in controversy exceeds $75,000 and the 26 parties are citizens of different states. 28 U.S.C. § 1332(a). By contrast, federal district 27 courts have federal question jurisdiction over “all civil actions arising under the 28 Constitution, laws, or treaties of the United States.” 28 U.S.C. §1331. 1 IV. DISCUSSION 2 As noted, Thunder Properties argues that the parties are not diverse for purposes 3 of diversity jurisdiction. (ECF No. 6 at 3.) The Bank counters that this Court may maintain 4 jurisdiction based on federal question jurisdiction, 28 U.S.C. § 1331. (ECF No. 12 at 4- 5 7.) 6 Federal district courts have federal question jurisdiction under the “well-pleaded 7 complaint rule” only when a properly pleaded complaint asserts a federal question on its 8 face. Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Because Deutsche Bank has 9 alleged that the “opt-in” provision of NRS § 116.3116 is unconstitutional under the due 10 process clause of the Fifth and Fourteenth Amendments of the United States 11 Constitution (see ECF No. 1 at 7), thereby making the HOA sale unlawful, this Court 12 must maintain § 1331 jurisdiction over this litigation. See Lowe v. Manhattan Beach City 13 Sch. Dist., 222 F.2d 258, 259–60 (9th Cir. 1955); see also Bell v. Hood, 327 U.S. 678, 14 681–82 (1946). 15 V. CONCLUSION 16 The Court notes that the parties made several arguments and cited to several 17 cases not discussed above. The Court has reviewed these arguments and cases and 18 determines that they do not warrant discussion as they do not affect the outcome of 19 Thunder Properties’ Motion. 20 21 It is therefore ordered that Thunder Properties’ Motion to Dismiss for Lack of Subject Matter Jurisdiction (ECF No. 6) is denied. 22 23 24 25 26 27 28 DATED THIS 14th day of August 2017 _________________________________ MIRANDA M. DU UNITED STATES DISTRICT JUDGE

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