Nationstar Mortg., LLC v. Maplewood Springs Homeowners Ass'n, Case No. 2:15–CV–1683 JCM (CWH)

• Decision Date: 01 March 2017
• Docket Number: Case No. 2:15–CV–1683 JCM (CWH)
• Citation: 238 F.Supp.3d 1257
• Parties: NATIONSTAR MORTGAGE, LLC, Plaintiff(s), v. MAPLEWOOD SPRINGS HOMEOWNERS ASSOCIATION, et al., Defendant(s).
• Court: U.S. District Court — District of Nevada

238 F.Supp.3d 1257

NATIONSTAR MORTGAGE, LLC, Plaintiff(s),

v.MAPLEWOOD SPRINGS HOMEOWNERS ASSOCIATION, et al., Defendant(s).

Case No. 2:15–CV–1683 JCM (CWH)

United States District Court, D. Nevada.

Signed March 1, 2017

Allison R. Schmidt, Allison R. Schmidt Esq. LLC, Ariel E. Stern, Darren T. Brenner, Akerman LLP, Las Vegas, NV, for Plaintiff(s).

Sean L. Anderson, Timothy C. Pittsenbarger, Leach Johnson Song & Gruchow, Jacqueline A. Gilbert, Karen L. Hanks, Diana Cline Ebron, Kim Gilbert Ebron, Las Vegas, NV, for Defendant(s).

ORDER

James C. Mahan, UNITED STATES DISTRICT JUDGE

Presently before the court is defendant Maplewood Springs Homeowners' Association's (the "HOA") renewed motion to dismiss. (ECF No. 75). Plaintiff/counterdefendant Nationstar Mortgage, LLC ("Nationstar") filed a response (ECF No. 84), as did defendant/counterclaimant SFR Investments Pool 1, LLC ("SFR") (ECF No. 78), to which the HOA replied (ECF Nos. 82; 91).¹

Also before the court is Deutsche Bank National Trust Company, as trustee for holders of the GSAA home equity trust 2006–11 asset backed certificates series 2006–11 ("Deutsche") and Nationstar's renewed motion for summary judgment. (ECF No. 70). The HOA and SFR filed responses (ECF Nos. 79, 87), to which Deutsche and Nationstar replied (ECF No. 89).

Also before the court is SFR's renewed motion for summary judgment. (ECF No. 71). Deutsche and Nationstar filed a response, (ECF No. 83), to which SFR replied (ECF No. 93).

Also before the court is the HOA's renewed motion for summary judgment (ECF No. 73). No responses were filed and the time to respond has since passed.²

I. Facts

The present case involves a dispute over real property located at 6229 Sugartree Avenue, Las Vegas, Nevada (the "property"). (ECF No. 1 at 2). Gholam H. Farzad (the "borrower") purchased the property on April 13, 2006. (ECF No. 1 at 3). The borrower financed the purchase with a $297,800.00 loan that was secured by a deed of trust dated April 13, 2006, and recorded on April 24, 2006. (ECF No. 1–1 at 2–18).

On October 10, 2012, the deed of trust was assigned to Deutsche, via an assignment of deed of trust. (ECF No. 1–2).

On February 7, 2013, Nevada Association Services, Inc. ("NAS"), as the HOA's trustee, recorded a notice of delinquent assessment lien. (ECF No. 1–5). The notice asserted that the borrower owed $1,409.08 in fees. (ECF No. 1–5 at 2).

On August 9, 2013, NAS, as the HOA's trustee, recorded a notice of default and election to sell to satisfy the delinquent assessment lien. (ECF No. 1–6). The notice asserted that the borrower owed $2,632.74 in fees. (ECF No. 1–6 at 2). On the same day as it was recorded, NAS mailed the notice of default and election to sell (via certified mail, return receipt requested) to the borrower, Bank of New York Mellon, Deutsche Bank National Trust, Countrywide Home Loans, Inc., and Mortgage Electronic Registration Services ("MERS"). (ECF Nos. 40 at 2; 40–2 at 4–5).

On October 1, 2013, Nationstar's interest in the deed of trust was recorded. (ECF No. 1–3).

On January 31, 2014, the HOA recorded a notice of trustee's sale through its agent. (ECF No. 1–7). The notice asserted that the borrower owed $4,106.60 in fees and that the trustee's sale would occur on February 21, 2014. (ECF No. 1–7 at 3). On the same day as it was recorded, NAS mailed the notice of trustee's sale (via certified mail, return receipt requested) to the borrower, Bank of New York Mellon ("BNYM"), Deutsche, Countrywide Home Loans, Inc., and Mortgage Electronic Registration Services ("MERS"). (ECF Nos. 40 at 2; 40–3 at 4–7).

NAS held the trustee's sale on April 4, 2014, at which SFR purchased the property for $16,000.00. (ECF No. 70–8 at 2). The foreclosure deed was recorded on April 7, 2014. (ECF No. 70–8).

Nationstar filed the original complaint on August 31, 2015, asserting four claims against the HOA and SFR: (1) declaratory relief/quiet title; (2) breach of Nevada Revised Statute ("NRS") 16.1113 against the HOA; (3) injunctive relief against SFR; and (4) violation of procedural due process. (ECF No. 1). Nationstar contends that the notices prior to the HOA's foreclosure sale violated NRS Chapter 116, that the HOA violated NRS 116.1113 by falsely promising its liens were subordinate to the senior deed of trust and thereafter failing to notify Nationstar that its security interest was at risk, that the sale should be set aside as it was commercially unreasonable, and that Nevada's statutory scheme providing superpriority liens to homeowner's associations is violative of procedural due process under the Constitution. (ECF No. 1).

On November 6, 2015, SFR filed an answer and counterclaim asserting three claims of relief against Nationstar, Deutsche, BNYM, and the borrower: (1) declaratory relief/quiet title; (2) preliminary and permanent injunction; and (3) slander of title. (ECF No. 18).

II. Legal standard

A. Motion to dismiss

The court may dismiss a plaintiff's complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A properly pled complaint must provide "[a] short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Although Rule 8 does not require detailed factual allegations, it does require more than labels and conclusions. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Furthermore, a formulaic recitation of the elements of a cause of action will not suffice. Ashcroft v. Iqbal , 556 U.S. 662, 677, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citation omitted). Rule 8 does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Id. at 678–79, 129 S.Ct. 1937.

To survive a motion to dismiss, a complaint must contain sufficient factual matter to "state a claim to relief that is plausible on its face." Id. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. When a complaint pleads facts that are merely consistent with a defendant's liability, and shows only a mere possibility of entitlement, the complaint does not meet the requirements to show plausibility of entitlement to relief. Id.

In Iqbal , the Supreme Court clarified the two-step approach district courts are to apply when considering a motion to dismiss. Id. First, the court must accept as true all of the allegations contained in a complaint. Id. However, this requirement is inapplicable to legal conclusions. Id. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id. at 678, 129 S.Ct. 1937. Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has "alleged—but not shown—that the pleader is entitled to relief." Id. at 679, 129 S.Ct. 1937. When the allegations in a complaint have not crossed the line from conceivable to plausible, plaintiff's claim must be dismissed. Twombly , 550 U.S. at 570, 127 S.Ct. 1955.

The Ninth Circuit addressed post- Iqbal pleading standards in Starr v. Baca , 652 F.3d 1202, 1216 (9th Cir. 2011). The Starr court held:

First, to be entitled to the presumption of truth, allegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively. Second, the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.

Id.

B. Motion for summary judgment

The Federal Rules of Civil Procedure allow summary judgment when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that "there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(a). A principal purpose of summary judgment is "to isolate and dispose of factually unsupported claims." Celotex Corp. v. Catrett , 477 U.S. 317, 323–24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

For purposes of summary judgment, disputed factual issues should be construed in favor of the non-moving party. Lujan v. Nat'l Wildlife Fed. , 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). However, to be entitled to a denial of summary judgment, the nonmoving party must "set forth specific facts showing that there is a genuine issue for trial." Id.

In determining summary judgment, a court applies a burden-shifting analysis. The moving party must first satisfy its initial burden. "When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case." C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc. , 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted).

By contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the non-moving party's case; or (2) by demonstrating that the non-moving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. See Celotex Corp. , 477 U.S. at 323–24, 106 S.Ct. 2548. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. See Adickes v. S.H. Kress & Co. , 398 U.S. 144, 159–60, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970).

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