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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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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DEUTSCHE BANK NATIONAL TRUST
COMPANY, SOLELY AS TRUSTEE FOR
HARBORVIEW MORTGAGE LOAN
TRUSTMORTGAGE LOAN PASSTHROUGH CERTIFICATES, SERIES
2005-11,

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ORDER

Plaintiff,
v.

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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,

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Defendants.

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I.

SUMMARY

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This case concerns a dispute over the constitutionality of a homeowner

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association (“HOA”) foreclosure sale. Before the Court is Defendant Thunder Properties,

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Inc.’s (“Thunder Properties”) Motion to Dismiss for Lack of Subject Matter Jurisdiction

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(“Motion”). (ECF No. 6.) The Court has reviewed Plaintiff Deutsche Bank National Trust

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Company’s (“Deutsche Bank”) response (ECF No. 12) and Thunder Properties’ reply

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(ECF No. 13). For the reasons discussed below, Thunder Properties’ Motion is denied.

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II.

BACKGROUND

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The following facts are taken from the Complaint. (ECF No. 1.)

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In May of 2005, Kendall Fielding and Cindi Yakimow (“Borrowers”) borrowed

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$244,000.00 to buy a home at 2690 Lawry Drive in Sparks, Nevada (“the Property”). The

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loan was secured by a Deed of Trust (“DOT”) on the Property. On December 12, 2012,

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the DOT was assigned to Deutsche Bank.

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When Borrowers became delinquent on their HOA dues, Defendant Wingfield

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Springs Community Association (“the HOA”) recorded a lien on the Property and

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eventually elected to sell the Property pursuant to Nevada’s HOA foreclosure statutes.

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On May 28, 2013, the HOA purchased the Property at a non-judicial foreclosure sale for

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$4,424.71. On January 6, 2014, the HOA conveyed its interest in the Property via

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quitclaim deed to Defendant Westland Construction Corporation (“Westland”). On

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February 27, 2014, Westland quitclaimed its interest in the Property to Thunder

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Properties.

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Amongst its other claims, Deutsche Bank seeks to quiet title pursuant to 28 U.S.C.

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§ 2201, NRS § 30.010 et seq., and NRS § 40.010, challenging the foreclosure sale as

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statutorily defective.

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The Complaint alleges diversity jurisdiction. (ECF No. 1 at 2.) Thunder Properties

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seeks dismissal for lack of subject matter jurisdiction, arguing that the parties are not

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diverse because Deutsche Bank and Thunder Properties are citizens of California. (ECF

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No. 6 at 3.)

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III.

LEGAL STANDARD

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Federal Rule of Civil Procedure 12(b)(1) allows a defendant to seek dismissal of

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a claim or action for lack of subject matter jurisdiction. Dismissal under Rule 12(b)(1) is

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appropriate if the complaint fails to allege facts that are sufficient to establish subject

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matter jurisdiction. In re Dynamic Random Access Memory (DRAM) Antitrust Litig., 546

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F.3d 981, 984-85 (9th Cir. 2008). Subject matter jurisdiction may be met through diversity

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jurisdiction or federal question jurisdiction. Federal district courts have diversity

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jurisdiction over lawsuits when the amount in controversy exceeds $75,000 and the

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parties are citizens of different states. 28 U.S.C. § 1332(a). By contrast, federal district

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courts have federal question jurisdiction over “all civil actions arising under the

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Constitution, laws, or treaties of the United States.” 28 U.S.C. §1331.

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IV.

DISCUSSION

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As noted, Thunder Properties argues that the parties are not diverse for purposes

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of diversity jurisdiction. (ECF No. 6 at 3.) The Bank counters that this Court may maintain

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jurisdiction based on federal question jurisdiction, 28 U.S.C. § 1331. (ECF No. 12 at 4-

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7.)

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Federal district courts have federal question jurisdiction under the “well-pleaded

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complaint rule” only when a properly pleaded complaint asserts a federal question on its

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face. Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Because Deutsche Bank has

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alleged that the “opt-in” provision of NRS § 116.3116 is unconstitutional under the due

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process clause of the Fifth and Fourteenth Amendments of the United States

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Constitution (see ECF No. 1 at 7), thereby making the HOA sale unlawful, this Court

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must maintain § 1331 jurisdiction over this litigation. See Lowe v. Manhattan Beach City

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Sch. Dist., 222 F.2d 258, 259–60 (9th Cir. 1955); see also Bell v. Hood, 327 U.S. 678,

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681–82 (1946).

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V.

CONCLUSION

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The Court notes that the parties made several arguments and cited to several

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cases not discussed above. The Court has reviewed these arguments and cases and

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determines that they do not warrant discussion as they do not affect the outcome of

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Thunder Properties’ Motion.

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It is therefore ordered that Thunder Properties’ Motion to Dismiss for Lack of
Subject Matter Jurisdiction (ECF No. 6) is denied.

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DATED THIS 14th day of August 2017
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MIRANDA M. DU
UNITED STATES DISTRICT JUDGE