Bank of Am., N.A. v. Yorkshire Manor I Homeowners Ass'n
| Decision Date | 14 January 2019 |
| Docket Number | Case No. 3:16-cv-00475-MMD-WGC |
| Parties | BANK OF AMERICA, N.A., Plaintiff, v. YORKSHIRE MANOR I HOMEOWNERS ASSOCIATION, et al., Defendants. |
| Court | U.S. District Court — District of Nevada |
This dispute arises from the foreclosure sale of property to satisfy a homeowners' association lien. Before the Court are Defendant Strada Properties, LLC's ("Strada") motion for summary judgment (ECF No. 49), Defendant Yorkshire Manor I Homeowners Association's ("Yorkshire" or ("HOA")) motion for summary judgment (ECF No. 54), and Plaintiff Bank of America, N.A.'s ("BANA") motion for summary judgment (ECF No. 55). The Court has reviewed the relevant joinders, responses, and replies (ECF Nos. 52, 56, 57, 59, 64, 65, 69, 70). For the following reasons, the Court denies Strada and Yorkshire's motions for summary judgment and grants BANA's motion for summary judgment.
The following facts are undisputed unless otherwise indicated.
This action concerns the parties' rights to real property located at 1617 London Circle, Sparks, NV 89431 ("Property"), within the HOA. (ECF No. 55 at 4.) Dinan J. Perry ("Borrower") executed a promissory note ("Note") in the amount of $124,500 in favor of Countrywide Home Loans, Inc. ("Lender") as the original lender on July 10, 2007. (ECF No. 49 at 2; ECF No. 55 at 4.) Repayment of the Note was secured by a deed of trust ("DOT") on the Property that was recorded on July 16, 2007. (ECF No. 49 at 2; ECF No. 55 at 4.) Under the DOT, Mortgage Electronic Registration Systems, Inc. ("MERS") was the original beneficiary of record, solely as a nominee for Lender and Lender's successors and assigns. (ECF No. 49 at 2-3; ECF No. 55 at 4.)
MERS assigned the DOT to BAC Home Loans Servicing, LP fka Countrywide Home Loans Servicing LP ("BAC") on August 25, 2008. (ECF No. 49 at 3.) The assignment was recorded on August 28, 2009. (Id.; ECF No. 55 at 4.)
BAC foreclosed on the DOT, and Federal National Mortgage Association ("Fannie Mae") purchased the Property at the foreclosure sale on March 26, 2010, for $134,660.03. (ECF No. 49 at 3; ECF No. 55 at 4.) A foreclosure deed was recorded on April 1, 2010. (ECF No. 49 at 3; ECF No. 55 at 4.) BAC assigned the DOT to Fannie Mae on March 30, 2010, and the assignment was recorded on April 1, 2010. (ECF No. 49 at 3; ECF No. 55 at 5.)
The HOA recorded a notice of delinquent assessment lien in the amount of $917 on September 28, 2009. (ECF No. 49 at 3.) The HOA recorded a second notice of delinquent assessment lien in the amount of $4,976.50 on October 27, 2010. (ECF No. 49 at 3; ECF No. 55 at 5.) The HOA recorded a notice of default and election to sell on March 25, 2011. (ECF No. 49 at 3; ECF No. 55 at 5.) The HOA recorded a notice of foreclosure sale on July 21, 2011, scheduling the sale for August 10, 2011, and indicating that the amount owed to the HOA was $6,992.50. (ECF No. 55 at 5.) The HOA sold the Property to Strada for $21,100 on August 10, 2011 ("HOA Sale"). (See ECF No. 49 at 4; ECF No. 55 at 5.)
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The HOA filed a state court interpleader action ("Interpleader Action") naming Fannie Mae as a defendant on October 19, 2011. (ECF No. 49 at 4.) Fannie Mae—BANA's predecessor in interest—failed to appear and default judgment was entered in favor of the HOA. (Id.)
Fannie Mae rescinded BAC's foreclosure of the DOT on February 12, 2014, transferring ownership of the Property back to the Borrower. (ECF No. 49 at 4; ECF No. 55 at 5.)
The DOT was assigned to BANA on April 7, 2014. (ECF No. 55 at 5.) BANA assigned the DOT to U.S. Bank Trust, N.A. as Trustee for LSF9 Master Participation Trust ("U.S. Bank.") on March 26, 2015, and the assignment was recorded on April 8, 2015. (ECF No. 49 at 4; ECF No. 55 at 5.) U.S. Bank assigned the DOT back to BANA, and the assignment was recorded on June 9, 2016. (ECF No. 55 at 5.)
BANA filed the Complaint in this action on August 10, 2016, asserting the following claims for relief: (1) declaratory judgment against all Defendants that the DOT survived the HOA Sale due to the Federal Foreclosure Bar; (2) declaratory judgment against all Defendants that the DOT survived the HOA Sale because the HOA Sale was commercially unreasonable or otherwise failed to comply with the good faith requirement of NRS § 116.3116; (3) quiet title against Strada; (4) wrongful foreclosure against the HOA; and (5) injunctive relief against Strada. (ECF No. 1.)
Strada asserted a counterclaim for quiet title. (ECF No. 11 at 6-7.)
"The purpose of summary judgment is to avoid unnecessary trials when there is no dispute as to the facts before the court." Nw. Motorcycle Ass'n v. U.S. Dep't of Agric., 18 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is appropriate when the pleadings,the discovery and disclosure materials on file, and any affidavits "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue is "genuine" if there is a sufficient evidentiary basis on which a reasonable fact-finder could find for the nonmoving party and a dispute is "material" if it could affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where reasonable minds could differ on the material facts at issue, however, summary judgment is not appropriate. See id. at 250-51. "The amount of evidence necessary to raise a genuine issue of material fact is enough 'to require a jury or judge to resolve the parties' differing versions of the truth at trial.'" Aydin Corp. v. Loral Corp., 718 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968)). In evaluating a summary judgment motion, a court views all facts and draws all inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).
The moving party bears the burden of showing that there are no genuine issues of material fact. Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). Once the moving party satisfies Rule 56's requirements, the burden shifts to the party resisting the motion to "set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 256. The nonmoving party "may not rely on denials in the pleadings but must produce specific evidence, through affidavits or admissible discovery material, to show that the dispute exists," Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991), and "must do more than simply show that there is some metaphysical doubt as to the material facts." Orr v. Bank of Am., NT & SA, 285 F.3d 764, 783 (9th Cir. 2002) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient." Anderson, 477 U.S. at 252.
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Strada first argues that the Interpleader Action precludes BANA's claims under the doctrine of claim preclusion. (ECF No. 49 at 5.) BANA responds, among other things, that Strada cannot assert claim preclusion because Strada was not involved in the Interpleader Action. (ECF No. 52 at 5.) The Court agrees with BANA.
The Court applies the claim preclusion rules of Nevada because Strada seeks to give preclusive effect to a Nevada state court judgment. Robi v. Five Platters, Inc., 838 F.2d 318, 322 (9th Cir. 1988) (). In Nevada, there are three elements that must be shown to assert claim preclusion: "(1) the parties or their privies are the same, (2) the final judgment is valid, and (3) the subsequent action is based on the same claims or any part of them that were or could have been brought in the first case." Five Star Capital Corp. v. Ruby, 194 P.3d 709, 713 (Nev. 2008), holding modified by Weddell v. Sharp, 350 P.3d 80 (Nev. 2015) (). "[B]oth the party against whom claim preclusion is asserted and the party asserting claim preclusion must have been 'involved' in the prior case or in privity with a party involved in the prior case." See Dockins v. Am. Family Fin. Servs., Inc., 606 F. App'x 877, 879 (9th Cir. 2015) (citing Ruby, 194 P.3d at 714). Strada—the party asserting claim preclusion—does not argue that it was involved in the Interpleader Action or in privity with a party involved in the Interpleader Action. (See ECF No. 56 at 2-3.) Accordingly, Strada cannot assert claim preclusion.
Strada further argues that BANA's claims are barred by issue preclusion. (ECF No. 56 at 3; see also ECF No. 49 at 7.) The Court rejects Strada's argument because it was raised for the first time in Strada's reply. (Compare ECF No. 49 at 7 with ECF No. 56 at 3.) "[I]t is improper for a party to raise a new argument in a reply brief." United States v.Boyce, 148 F. Supp. 2d 1069, 1085 (S.D. Cal.2001) aff'd, 36 F. App'x 612 (9th Cir. 2002) (citing United States v. Bohn, 956 F.2d 208, 209 (9th Cir. 1992)). The Court also rejects this argument on its merits.
"The doctrine of issue preclusion prevents relitigation of all 'issues of fact or law that were actually litigated and necessarily decided' in a prior proceeding." Robi, 838 F.2d at 322 (quoting Segal v. Am. Tel. & Tel. Co., 606 F.2d 842, 845 (9th Cir. 1979)). Under Nevada law,1 issue preclusion applies if the following factors are satisfied: "'(1) the issue decided in the prior...
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