238 F. Supp. 3d 1257
D. Nev.2017Background
- Property at 6229 Sugartree Ave., Las Vegas purchased in 2006; secured by a deed of trust later assigned to Deutsche Bank and then Nationstar recorded interest in October 2013.
- HOA (Maplewood Springs) recorded notices of delinquent assessment, default, and a trustee’s sale; trustee’s sale occurred April 4, 2014, and SFR purchased the property for $16,000; foreclosure deed recorded April 7, 2014.
- Nationstar filed suit (2015) seeking quiet title/declaratory relief, breach of NRS 116.1113, injunctive relief, and procedural due process violations; SFR counterclaimed for quiet title, injunction, and slander of title.
- Dispositive motions: HOA renewed motion to dismiss; Nationstar and Deutsche Bank renewed motion for summary judgment; SFR and HOA filed cross-motions for summary judgment.
- Court treated injunctive-relief claim as improperly pled (remedy, not cause of action), dismissed certain claims without prejudice (breach of NRS 116.1113; procedural due process claim), and focused remaining dispute on whether the HOA foreclosure validly extinguished Nationstar’s first deed of trust.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Nationstar’s quiet-title claim can proceed | Nationstar: foreclosure sale void; deed of trust survived sale | HOA/SFR: sale valid; deed recitals conclusive and extinguished deed of trust | Quiet-title claim survives as to HOA; SFR entitled to declaratory judgment that deed of trust was extinguished (summary judgment for SFR on quiet title) |
| Whether claim for breach of NRS 116.1113 must be dismissed for failure to mediate under NRS 38.310 | Nationstar: exhaustion statute does not bar claim here | HOA: NRS 38.310 requires mediation before suit; dismissal required | Dismissed without prejudice for failure to submit to statutorily required mediation (NRS 38.310) |
| Whether Nationstar stated a procedural due process violation | Nationstar: Chapter 116 notice scheme facially unconstitutional; sale violated due process | HOA/SFR: either no state action or adequate notice was provided (actual notice) | Procedural due process claim dismissed — Nationstar failed to plead lack of notice; where actual/adequate notice was received, no standing to attack statute’s opt-in provision |
| Whether foreclosure deed recitals conclusively prove statutory compliance and bar equitable relief | SFR: recitals conclusive under NRS 116.31166; sale valid as a matter of law | Banks: Shadow Wood limits conclusive effect; equitable relief available for gross inadequacy plus fraud/unfairness/oppression | Recitals are conclusive only as to default/notice/timing; equitable relief remains available (Shadow Wood). Court granted SFR summary judgment on statutory compliance but denied Banks’ summary judgment on equitable grounds due to factual disputes |
Key Cases Cited
- Bourne Valley Court Tr. v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016) (Chapter 116 constitutes state action and the NRS 116 opt-in notice provision is facially unconstitutional)
- Shadow Wood Homeowners Assoc. v. N.Y. Cmty. Bancorp., Inc., 366 P.3d 1105 (Nev. 2016) (equitable relief can set aside an HOA foreclosure despite conclusive deed recitals where gross inadequacy plus fraud, unfairness, or oppression exists)
- SFR Invs. Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014) (proper HOA superpriority foreclosure can extinguish a senior deed of trust)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burden-shifting framework)
- Mennonite Bd. of Missions v. Adams, 462 U.S. 791 (U.S. 1983) (due process requires notice reasonably calculated to apprise interested parties of proceedings)