Carrington Mortgage Services, LLC v. Montecito Village Community Associatin
2:16-cv-01780
D. Nev.Jul 7, 2017Background
- Property at 8552 Barkeria Ct., Las Vegas; original deed of trust recorded March 2008; foreclosure sale by HOA trustee occurred March 1, 2013; trustee’s deed recorded March 4, 2013.
- Premier purchased the property at the HOA nonjudicial foreclosure and holds the trustee’s deed upon sale; recitals in that deed are recorded and relied on by Premier.
- Bank of America (BANA) requested HOA ledger, calculated a superpriority amount ($423) and allegedly tendered that amount, which HOA/NAS refused; the notice of default reflected $2,440.90 due.
- CMS (assignee of the deed of trust recorded March 2, 2015) sued in 2016 asserting quiet title (count 1), breach of NRS 116.1113 (count 2), wrongful foreclosure (count 3), and injunctive relief (count 4); NAS defaulted; HOA and Premier moved for summary judgment and CMS cross-moved.
- Court found counts 2 and 3 time-barred (statute of limitations) and dismissed count 4 as not a standalone cause of action; addressed quiet title claim on equitable grounds and statutory framework (NRS Ch. 116).
- Court granted summary judgment to HOA and Premier, denied CMS’s motion, concluding CMS failed to show grounds to set aside the foreclosure (no timely tender, no due-process standing, no fraud/unfairness/oppression, SFR applies).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Statute of limitations for statutory-duty and wrongful-foreclosure claims | CMS: claims under NRS 116.1113 and wrongful foreclosure are timely and meritorious | HOA: those damage claims are subject to a 3‑year statute and are untimely | Court: Counts 2 and 3 dismissed with prejudice as time‑barred (3‑year limit) |
| Quiet title — whether HOA foreclosure extinguished the deed of trust | CMS: foreclosure invalid; alleged tender of superpriority amount was rejected; sale should be set aside | Premier/HOA: recorded trustee’s deed with conclusive recitals; CMS lacked superior title and failed to show entitlement to equitable relief | Court: quiet title for Premier/HOA; CMS failed to show grounds to set aside sale; summary judgment for Premier and HOA, CMS denied |
| Due process challenge under Bourne Valley (opt‑in notice) | CMS: Bourne Valley renders NRS 116 notice scheme unconstitutional and factual notice irrelevant | Premier/HOA: CMS lacks standing to assert due‑process claim because CMS was not deedholder at time of sale; actual notice not shown | Court: CMS has no procedural‑due‑process claim — it was not holder at sale; Bourne Valley did not entitle CMS to summary judgment |
| Commercial reasonableness / grossly inadequate price | CMS: sale price (~7% of FMV) is grossly inadequate and supports setting aside sale | Premier/HOA: price alone insufficient; must show fraud, unfairness, or oppression; CMS presents no such evidence | Court: sale not set aside — CMS failed to prove fraud/unfairness/oppression; commercial‑reasonableness challenge fails |
Key Cases Cited
- SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014) (establishes HOA superpriority lien and that proper HOA nonjudicial foreclosure can extinguish a first deed of trust)
- Shadow Wood Homeowners Ass’n v. N.Y. Cmty. Bancorp., Inc., 366 P.3d 1105 (Nev. 2016) (equitable power to set aside HOA foreclosure where grossly inadequate price plus fraud, unfairness or oppression exist; recitals conclusive as to statutory prerequisites)
- Bourne Valley Court Tr. v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016) (held NRS 116.31163(2) opt‑in notice provision facially violates due process)
- McKnight Family, L.L.P. v. Adept Mgmt., 310 P.3d 555 (Nev. 2013) (distinguishes wrongful‑foreclosure claims that challenge authority to foreclose)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary‑judgment burden‑shifting framework)