Carrington Mortgage Services, LLC v. Devonridge Homeowners Association, Inc., 033019 NVDC, 2:17-cv-01837-RFB-VCF

Docket Nº2:17-cv-01837-RFB-VCF
Opinion JudgeRICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE.
Party NameCARRINGTON MORTGAGE SERVICES, LLC, a California corporation, Plaintiff, v. DEVONRIDGE HOMEOWNERS ASSOCIATION, INC., a Nevada corporation; SFR INVESTMENTS POOL 1, LLC, a Nevada limited liability company, Defendants. DEVONRIDGE HOMEOWNERS ASSOCIATION, INC., a Nevada corporation; Third-Party Plaintiff, v. NEVADA ASSOCIATION SERVICES, INC., Third-...
Case DateMarch 30, 2019
CourtUnited States District Courts, 9th Circuit, United States District Courts. 9th Circuit. District of Nevada

CARRINGTON MORTGAGE SERVICES, LLC, a California corporation, Plaintiff,

v.

DEVONRIDGE HOMEOWNERS ASSOCIATION, INC., a Nevada corporation; SFR INVESTMENTS POOL 1, LLC, a Nevada limited liability company, Defendants.

DEVONRIDGE HOMEOWNERS ASSOCIATION, INC., a Nevada corporation; Third-Party Plaintiff,

v.

NEVADA ASSOCIATION SERVICES, INC., Third-Party Defendant.

No. 2:17-cv-01837-RFB-VCF

United States District Court, D. Nevada

March 30, 2019

ORDER

RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE.

I. INTRODUCTION

Before the Court are three contested motions: Defendant SFR Investments Pool 1, LLC's Motion to Dismiss, ECF No. 33; SFR's Motion for Summary Judgment, ECF No. 39; and Plaintiff Carrington Mortgage Services's Motion for Summary Judgment, ECF No. 37.

II. PROCEDURAL BACKGROUND

This matter arises from a nonjudicial foreclosure sale conducted by a homeowners' association under Nevada Revised Statutes (“NRS”) Chapter 116 in 2013. ECF No. 1.

Carrington sued SFR and Devonridge Homeowners Association, Inc. (“the HOA”) on July 5, 2017. Id. Carrington alleged two claims: (1) quiet title or declaratory relief against all Defendants and (2) unjust enrichment against SFR. Id. Carrington filed a notice of lis pendens on July 6, 2017. ECF No. 5.

The HOA answered the complaint on August 11, 2017. ECF No. 11. It then filed a third-party complaint against Nevada Association Services, Inc. (“NAS”) on September 7, 2017. ECF No. 13.

After SFR moved to dismiss the complaint on January 2, 2018, ECF No. 20, the Court stayed the matter pending the Nevada Supreme Court's decision on a certified question and denied all pending motions without prejudice to refiling. ECF No. 25. The Nevada Supreme Court issued its decision in August 2018.

The HOA was dismissed from this matter on May 8, 2018 per stipulation. ECF Nos. 26, 27. NAS was then voluntarily dismissed. ECF No. 28.

SFR now moves again to dismiss the complaint and moves for summary judgment. ECF Nos. 33, 39. Carrington opposed the motions, and SFR replied. ECF Nos. 35, 36, 40, 43.

Carrington also moves for summary judgment. ECF No. 37. SFR opposed the motion, and Carrington replied. ECF Nos. 41, 42.

III. MOTION TO DISMISS

The Court first turns to the pending motion to dismiss.

a. Factual Background

The Complaint alleges the following:

This matter concerns the property at 813 Pirates Cave Court, North Las Vegas, Nevada 89032. ECF No. 1. The HOA manages and maintains the common unit amenities for the community in which the property sits.

On October 7, 2008, nonparty Andrea Ketay purchased the property for $194, 761.00 by executing a promissory note in favor of Taylor, Bean & Whitaker Mortgage Corp. Ketay also executed a corresponding deed of trust, which was recorded on October 10, 2008. The deed of trust encumbers the property as security to ensure repayment of the loan.

Ketay defaulted on both the loan and the payment of homeowners' association dues. Based on the delinquent homeowners' association dues, nonparty Bank of America requested a super-priority lien account statement from NAS in April 2011. NAS served as the HOA's agent. Bank of America made the request through its attorneys at the law firm of Miles, Bauer, Bergstrom & Winters, LLP.

Bank of America requested the super-priority lien account statement for the express purpose of curing the super-priority portion of HOA's lien. NAS refused to provide a super-priority lien statement, instead providing a full lien account statement showing a balance of $2, 231.31. Based on the full lien statement, the law firm calculated the super-priority portion of the HOA's lien by totaling nine months of homeowners' association dues, pursuant to NRS 116.3116.

The law firm tendered a cashier's check for the super-priority lien amount to NAS to cure the super-priority portion of the lien. The tender of the super-priority lien amount to NAS served to extinguish that portion of HOA's lien, leaving only the portion of HOA's lien which is junior to Carrington's first deed of trust.

On October 7, 2011, all beneficial interests under the deed of trust were assigned to Nonparty Bank of America, NA.

On August 23, 2013, the HOA sold the property at an auction through its agent, Nevada Association Services, Inc. (“NAS”). SFR purchased the property for $14, 000.00.

On April 17, 2017, all beneficial interests under the deed of trust were then assigned to Carrington.[1]

b. Legal Standard

In order to state a claim upon which relief can be granted, a pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). In ruling on a motion to dismiss for failure to state a claim, “[a]ll well-pleaded allegations of material fact in the complaint are accepted as true and are construed in the light most favorable to the non-moving party.” Faulkner v. ADT Security Servs., Inc., 706 F.3d 1017, 1019 (9th Cir. 2013). To survive a motion to dismiss, a complaint must contain “sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face, ” meaning that the court can reasonably infer “that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation and internal quotation marks omitted). Additionally, Federal Rule of Civil Procedure 12 also permits a party to move to dismiss a complaint for “failure to join a party under Rule 19.” Fed.R.Civ.P. 12(b)(7).

c. Discussion

SFR moves to dismiss the complaint, arguing that: the claims are time barred by a three-year statute of limitations; declaratory relief is not an independent cause of action; the unjust enrichment claim fails as a matter of law; Carrington failed to notify the Nevada Attorney General of its constitutional challenge to NRS 116.3116 in violation of Rule 5.1; and Carrington failed to join necessary parties in violation of Rule 19 and NRS 30.130. The Court addresses each argument in turn.

i. Statute of Limitations

SFR first argues to dismiss the complaint as time barred by the three-year statute of limitations at NRS 11.190(3), contending that Carrington asserts claims based only on statutory liabilities created by NRS Chapter 116. Carrington argues that its first claim is entitled to a five-year statute of limitations under NRS 11.070 and NRS 11.080. Carrington also argues that the five-year statute of limitations began to run on September 18, 2014 when the Nevada Supreme Court issued SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014) (holding NRS Chapter 116 creates a super-priority lien). Carrington also contends that its unjust enrichment claim is entitled to a four-year statute of limitations.

Accepting the allegations in the complaint as true, the Court determines whether “the running of the statute is apparent on the face of the complaint.” Huynh v. Chase Manhattan Bank, 465 F.3d 992, 997 (9th Cir. 2006) (citation omitted). A complaint may be dismissed as...

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