Bank of America, N.A. v. Silver Terrace II Landscape Maintenance Association

[2] 3 UNITED STATES DISTRICT COURT 4 DISTRICT OF NEVADA 5 * * * 6 BANK OF AMERICA, N.A., Case No. 3:16-cv-00714-MMD-WGC ____ 7 Plaintiff, ORDER v. [8] SILVER TERRACE II LANDSCAPE 9 MAINTENANCE ASSOCIATION, et al., 10 Defendants. [11] 12 I. SUMMARY 13 This dispute arises from a non-judicial foreclosure sale of real property located at 14 8975 Silverkist Drive, Reno, Nevada 89506 (“Property”) to satisfy a homeowners’ 15 association lien. Before the Court are: (1) Plaintiff Bank of America, N.A.’s (“BANA”) 16 motion for partial summary judgment on its quiet title/declaratory judgment claim (ECF No. 17 109); and (2) Defendant Silver Terrace II Landscape Maintenance Association’s (“HOA”) 18 motion for summary judgment on all claims BANA asserts against it (ECF No. 112)1. The 19 Court agrees with BANA that it properly tendered the superpriority lien amount to preserve 20 the first deed of trust and will accordingly grant BANA’s motion for partial summary 21 judgment. 22 II. RELEVANT BACKGROUND 23 The following facts are undisputed unless otherwise indicated.2 24 /// [25] 1 The Court has reviewed the responses (ECF Nos. 113, 114, 115 (Defendant 26 Ravenstar Investments, LLC’s response)) and replies (ECF Nos. 119, 120) relating to these motions. [27] 2The Court takes judicial notice of the publicly available records of the Washoe 28 County Recorder (ECF Nos. ECF Nos. 109-1–109-6, 109-8, 109-10, 109-11). 2 by a first deed of trust (“DOT”) against the Property in October 2006. (ECF No. 109-1.) 3 The DOT was assigned to Countrywide Bank, N.A. in 2006, to Countrywide Home Loans, 4 Inc. in 2007, to Countrywide Home Loan Servicing, LP in 2008, to the Secretary of Housing 5 and Urban Development in 2014, to Bayview Loan Servicing in 2014, and then to BANA 6 in 2017. (ECF Nos. 109-2, 109-3 (evidencing merger).) 7 The HOA recorded a notice of delinquent assessments and claim of lien for the 8 HOA’s assessments against the Property on June 7, 2011, through its agent, Kern & 9 Associates, Ltd (“Kern”). (ECF No. 109-4.) The HOA recorded a notice of default and 10 election to sell to satisfy the delinquent assessment lien against the Property on October 11 10, 2011. (ECF No. 109-5.) BANA subsequently requested a ledger from the HOA, through 12 its then agent Phil Frink & Associates (“Frink”), identifying the superpriority amount 13 allegedly owed to the HOA, and offering to pay the superpriority portion of the HOA’s lien. 14 (ECF No. 109-7 at 3, 6–7, 9.) The HOA, through its agent Kern, refused to provide a ledger 15 or identify the superpriority amount, and instead provided a letter, dated December 22, 16 2011, identifying a quarterly assessment amount of $99.00 and a total amount owing of 17 $2,654.45, as of December 21, 2011. (Id. at 3, 11.) The HOA’s letter said nothing about 18 nuisance or abatement charges. (See id.) Based on the $99.00 quarterly assessment 19 amount identified, BANA calculated the superpriority lien amount—the sum of nine20 months (three-quarters) of common assessments (see infra)—to be $297.00 and 21 delivered that amount to Kern on January 12, 2012. (Id. at 3, 13–15.) Kern rejected the 22 payment and proceeded to foreclose. (Id. at 4, 9; ECF No. 109-6.) 23 The HOA foreclosed on the Property on May 24, 2012 (“HOA Sale”), purchasing 24 the Property itself for $400.00. (ECF No. 109-8.) Defendant Ravenstar Investments, LLC 25 (“Ravenstar”) acquired the Property via a quitclaim deed from the HOA recorded on March 26 6, 2014. (ECF No. 109-10.) Ronald L. Brandon purportedly acquired an interest as the 27 beneficiary to a deed of trust from Ravenstar, recorded August 11, 2014. (ECF No. 10928 11.) 2 title/declaratory judgment against all Defendants (id. at 7–12); (2) Breach of NRS § 3 116.1113 against the HOA and its agents (Kern and Frink) (id. at 12–13); (3) wrongful 4 foreclosure against the same (id. at 14–15); and (4) injunctive relief against Ravenstar and 5 Brandon. 6 III. LEGAL STANDARD 7 “The purpose of summary judgment is to avoid unnecessary trials when there is no 8 dispute as to the facts before the court.” Nw. Motorcycle Ass’n v. U.S. Dep’t of Agric., 18 9 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is appropriate when the pleadings, 10 the discovery and disclosure materials on file, and any affidavits “show that there is no 11 genuine issue as to any material fact and that the moving party is entitled to a judgment 12 as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue is 13 “genuine” if there is a sufficient evidentiary basis on which a reasonable fact-finder could 14 find for the nonmoving party and a dispute is “material” if it could affect the outcome of the 15 suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 16 The moving party bears the burden of showing that there are no genuine issues of 17 material fact. Zoslaw v. MCA Distrib. Corp., 693 F.2d 870 , 883 (9th Cir. 1982). Once the 18 moving party satisfies Rule 56’s requirements, the burden shifts to the party resisting the 19 motion to “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 20 477 U.S. at 256. The nonmoving party “may not rely on denials in the pleadings but must 21 produce specific evidence, through affidavits or admissible discovery material, to show 22 that the dispute exists,” Bhan v. NME Hosps., Inc., 929 F.2d 1404 , 1409 (9th Cir. 1991), 23 and “must do more than simply show that there is some metaphysical doubt as to the 24 material facts.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 783 (9th Cir. 2002) (quoting 25 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). “The mere 26 existence of a scintilla of evidence in support of the plaintiff’s position will be insufficient.” 27 Anderson, 477 U.S. at 252. Moreover, a court views all facts and draws all inferences in 28 /// 2 Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986). 3 IV. DISCUSSION 4 The HOA makes arguments in its motion for summary judgment as well as its 5 response to BANA’s motion for partial summary judgment that the Court need not consider 6 because BANA’s tender preserved the DOT. (See ECF Nos. 112, 113.) The HOA takes 7 no substantive position concerning tender. (See id.) Accordingly, the Court considers only 8 BANA and Ravenstar’s arguments on the issue. 9 In several recent decisions, the Nevada Supreme Court effectively put to rest the 10 issue of tender. For example, in Bank of Am., N.A. v. SFR Invs. Pool 1, LLC, 427 P.3d 113 11 (Nev.), as amended on denial of reh’g (Nov. 13, 2018) (“Diamond Spur”), the Nevada 12 Supreme Court held “[a] valid tender of payment operates to discharge a lien or cure a 13 default.” Id. at 117, 121 . And it reaffirmed that “that the superpriority portion of an HOA 14 lien includes only charges for maintenance and nuisance abatement, and nine months of 15 unpaid assessments.” Id. at 117 . More recently, the Nevada Supreme Court held that an 16 offer to pay the superpriority amount coupled with a rejection of that offer discharges the 17 superpriority portion of the HOA’s lien, even if no money changed hands. See Bank of 18 America, N.A. v. Thomas Jessup, LLC Series VII, 435 P.3d 1217, 1218 (Nev. 2019). Even 19 more recently, the Ninth Circuit weighed in to confirm that the Nevada Supreme Court 20 settled this issue—“the holder of the first deed of trust can establish the superiority of its 21 interest by showing that its tender satisfied the superpriority portion of the HOA’s lien,” 22 which “consists of nine months of unpaid HOA dues and any unpaid charges for 23 maintenance and nuisance abatement.” Bank of Am., N.A. v. Arlington W. Twilight 24 Homeowners Ass’n (“Twilight”), 920 F.3d 620, 623 (9th Cir. 2019). 25 Here, BANA tendered the superpriority amount. Nonetheless, in an attempt to 26 create a dispute as to the adequacy of the tendered amount, Ravenstar essentially argues 27 that BANA’s tender was ineffective because BANA did not tender the full amount the HOA 28 provided was then owing. (ECF No. 115 at 5–7.) However, as indicated above, BANA was 2 months of unpaid assessments and charges for maintenance and nuisance abatement. 3 BANA specifically calculated the nine months of assessments based on the $99.00 for 4 quarterly assessments and tendered the proportionate amount—$297—to the HOA’s 5 agent. Further, there is no genuine dispute regarding whether BANA had to also pay 6 maintenance and nuisance abatement charges. It did not. This is because there is no 7 indication that the HOA incurred such charges; in fact, the HOA makes no such claim here 8 (see generally ECF Nos. 112, 113). Cf. Twilight, 920 F.3d at 623 (citing Diamond Spur, [9] 427 P.3d at 118 ) (“If the HOA’s ledger does not show any charges for maintenance or 10 nuisance abatement, a tender of nine months of HOA dues is sufficient.”). As Ravenstar 11 raises no other relevant arguments, the Court finds that Diamond Spur is dispositive in 12 favor of BANA here. The Court therefore concludes that the HOA Sale did not extinguish 13 BANA’s DOT, even though the HOA rejected BANA’s tender. See Diamond Spur, 427 14 P.3d at 121–22. 15 V. CONCLUSION 16 The Court notes that the parties made several arguments and cited to several cases 17 not discussed above. The Court has reviewed these arguments and cases and determines 18 that they do not warrant discussion as they do not affect the outcome of the issues before 19 the Court. 20 It is therefore ordered that BANA’s motion for partial summary judgment on its quiet 21 title/declaratory judgment claim (ECF No. 109) is granted. The Court declares that the 22 HOA Sale did not extinguish BANA’s DOT and thus Ravenstar’s interest in the Property is 23 subject to the DOT. 24 It is further ordered that BANA’s remaining claims, which are alleged in the 25 alternative, are dismissed as moot. 26 /// 27 /// 28 /// 1 It is further ordered that the HOA’s motion for summary judgment (ECF No. 112) is 2 || therefore denied. The Clerk of the Court is directed to enter judgment accordingly and 3 || close this case. 4 DATED THIS 27" day of March 2020. [1] 6 / — MIRANDA M. DU 7 CHIEF UNITED STATES DISTRICT JUDGE