U.S. Bank N.A. v. Lamplight Square @ Coronado Ranch Homeowners' Association
2:15-cv-01292
D. Nev.Mar 9, 2016Background
- Property at issue: 8376 Hunter Brook St., Las Vegas; deed of trust originally securing a $261,000 loan assigned to U.S. Bank.
- Lamplight HOA recorded a series of notices between 2009–2011 for delinquent assessments and trustee’s sales; HOA purchased the property at trustee’s sale in March 2011 for $8,425.91.
- Notices and sale documents did not specify whether any portion of the HOA lien was a statutory "super‑priority" lien or itemize attorney/collection fees.
- U.S. Bank sued asserting: (1) violation of NRS 116.1113 (good faith), (2) wrongful foreclosure, and (3) quiet title/declaratory relief; sought to set aside the trustee’s sale.
- Lamplight moved to dismiss under Fed. R. Civ. P. 12(b)(6). The court considered recorded public documents submitted by the parties.
- Court dismissed the NRS 116.1113 and wrongful foreclosure claims without prejudice (allowing amendment) but denied the motion as to quiet title.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether U.S. Bank pleaded a viable claim under NRS 116.1113 (good faith) | NRS 116.1113 imposes a duty of good faith on HOA actions; HOA failed to notify Bank that its security interest was at risk | Complaint fails to identify any contract or duty between the Bank and HOA that would trigger NRS 116.1113 | Dismissed without prejudice for failure to plead the requisite underlying contract/duty; leave to amend granted |
| Whether wrongful foreclosure claim adequately pleaded | Foreclosure was wrongful because HOA violated NRS 116.1113 and thus lacked right to extinguish the senior deed of trust | Wrongful foreclosure theory depends on the deficient NRS 116.1113 pleading | Dismissed without prejudice (tied to NRS 116.1113 defect); leave to amend granted |
| Whether U.S. Bank stated a quiet title claim to set aside HOA nonjudicial sale | Sale price was grossly inadequate and HOA engaged in fraud/unfairness by not disclosing super‑priority status, miscalculating lien, and refusing tender | Sale was properly conducted under Chapter 116; mediation argument raised (NRS 38.310) | Claim survives: court found plausible allegations of grossly inadequate price plus fraud/unfairness/oppression; motion denied as to quiet title |
| Whether mediation statute barred quiet title suit | N/A in plaintiff's core quiet title argument | HOA argued mediation requirement precluded suit | Court did not dismiss on that ground; noted quiet title claims are exempt from mediation under Nevada precedent and proceeded on quiet title merits |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (pleading must state a plausible claim)
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard for pleadings)
- Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542 (courts may consider documents incorporated by reference on 12(b)(6))
- Branch v. Tunnell, 14 F.3d 449 (documents whose contents are alleged in the complaint may be considered on a motion to dismiss)
- Mack v. South Bay Beer Distrib., 798 F.2d 1279 (judicial notice of public records)
- DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655 (leave to amend after dismissal)
- Foman v. Davis, 371 U.S. 178 (standard for granting leave to amend)
- Collins v. Union Fed. Sav. & Loan Ass’n, 662 P.2d 610 (Nev. wrongful foreclosure principle)
- Chapman v. Deutsche Bank Nat’l Trust Co., 302 P.3d 1103 (quiet title requires superiority of title)
- Long v. Towne, 639 P.2d 528 (sale may be set aside for grossly inadequate price plus fraud/unfairness/oppression)