ORDER
Prеsently before the court is defendant Maplewood Springs Homeowners’ Association’s (the “HOA”) renewed motion to dismiss. (ECF No. 75). Plaintiff/counter-defendant 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).
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.
1. Facts
The present case involves а 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. (EOF-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. 1-6). 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 electiоn 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).
Nаtionstar 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 Re
On November 6, 2015, SFR filed an answer and counterclaim asserting three claims of relief against Nationstar, Deutsche, BNYM, and the borrower: (1) declаratory 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 plaintiffs 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,
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,
The Ninth Circuit addressed post-Iqbal pleading standards in Starr v. Baca,
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 allegationsthat 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,
For purposes of summary judgment, disputed factual issues should be construed in favor of the non-moving party. Lujan v. Nat’l Wildlife Fed.,
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 eаch issue material to its case.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc.,
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.,
If the moving party satisfies its initial burden, the burden then shifts to the opposing party to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
In other words, the nonmoving party cannot avoid summary judgment by relying solely on eonclusory allegations that are unsupported by factual data. See Taylor v. List,
At summary judgment, a court’s function is not to weigh the evi
III. Discussion
The HOA seeks to dismiss Nationstar’s claims and argues: (1) that Nationstar does not have an adverse interest in the property to sustain a claim of declaratory relief/quiet title; (2) that NRS 38.810 bars claims based on‘covenants, conditions and restrictions (“CC & Rs”) that have not first been mediated; and (3) that NRS 116.31162-31168’s notice provisions satisfy due process. (ECF No. 75 at 2).
A. Motion to dismiss
1. Injunctive relief
Preliminarily, this court turns to Nationstar’s cause of action for injunctive relief. (ECF No. 1 at 8-9). Though the parties omit argument for dismissing this cause of action in the briefing, the court finds no sustainable cause of action for injunctive relief. In fact, injunctive relief is a remedy, not a cause of action. See, e.g., Ajetunmobi v. Clarion Mortg. Capital, Inc.,
2. Untimely response
The local rules have the force of law. See United States v. Hvass,
Indeed, Nationstar and Deutsche failed to timely respond in accordance with
This court also finds that granting the HOA’s motion to dismiss would not enhance the court’s ability to effectively manage its docket. See Ghazali,
This court acknowledges the public’s interest in an expeditious resolution of litigation. See id. However, dismissal is an inappropriate sanction in this circumstance because, inter alia, Nationstar and Deutsche’s responses are on record, and the HOA has already replied to those responses. See (EGF Nos. 83, 84, 91).
Accordingly, the court will not dismiss Nationstar’s complaint, and continues with its analysis under the briefings.
3. Declaratory Relief ¡Quiet Title
In Nevada, “[a]n action may be brought by any person against another who claims an estate or interest in real property, adverse to the person bringing the action for the purpose of determining such adverse claim.” Nev. Rev. Stat. § 40.010. “A plea to quiet title does not require any particular elements, but ‘each party must plead and prove his or her own claim to the property in question’ and a ’plaintiffs right to relief therefore depends on superiority of title.” Chapman v, Deutsche Bank Nat’l Trust Co.,
The HOA maintains that it does not have a current adverse interest in the property as required by a plea to quiet title under NRS 40.010 and asks the court to dismiss it from this claim. (ECF No. 75 at 6). The HOA states it never made a claim to title, and that while it had a lien on the property in the past, it does not currently. (ECF No. 75 at 6).
Under rule 19(a), a party must be joined as a “required” party in two circumstances: (1) when “the court cannot accord complete relief among existing parties” in that party’s аbsence, or (2) when the absent party “claims an interest relating to the subject of the action” and resolving the action in the person’s absence may, as a practical matter, “impair or impede the person’s ability to protect the interest,” or may “leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.” Fed. R. Civ. P. 19(a)(1).
This court has previously held that dismissal is appropriate when the holder of the prior deed of trust seeks a declaration that the deed of trust survived foreclosure sale. See, e.g., Bayview Loan Servicing, LLC v. SFR Investments Pool 1, LLC, No. 2:14-CV-1875-JCM-GWF,
Here, the court cannot dismiss the HOA as a party to the quiet title action because Nationstar alleges that the HOA foreclosure sale is void. If Nationstar succeeds in
4. Breach of NRS 116.1113
The HOA asserts that Nations-tar’s claim for breach of NRS 116.1113 must be dismissed as it has not been submitted to mediation or arbitration in violation of NRS 38.310. (ECF No. 75 at 3-4).
Section 38,310 provides, in relevant part: No civil action based upon a claim relating to: (a) [t]he interpretation, application, or enforcement of any covenants, conditions or restrictions applicable to residential property or any bylaws, rules or regulations adopted by an association ... may be commenced in any court in this State unless the action has been submitted to mediation or, if the parties agree, has been referred to a program pursuant to the provisions of NRS 38.300 to 38.360, inclusive ....
Nev. Rev. Stat. § 38.310(1). Subsection (2) continues, stating that a “court shall dismiss any civil action which is commenced in violation of the provisions of subsection 1.” Nev. Rev. Stat. § 38.310(2).
Under NRS 38.300(3), a civil action includes “an action for money damages or equitable relief,” but not “an action in equity for injunctive relief in which there is an immediate threat of irreparable harm, or an action relating to the title to residential property,” Violation of NRS 116.1113 is a “civil action[] as defined in NRS 38.300.” McKnight Family, L.L.P. v. Adept Mgmt.,
Nationstar argues that NRS 38.310 cannot affect this court’s subject matter jurisdiction. (ECF No. 84 at 8). The court disagrees. NRS 38.310 is an exhaustion statute that creates prerequisites for filing certain state-law claims, not a'jurisdictional statute. See McBride Cotton & Cattle Corp. v. Veneman,
Consequently, because an alleged violation of NRS 116.1113 is defined as a civil action under Nevada law and the claim present here has not been submitted to mediation, the court will dismiss Nations-tar’s claim for breach' of NRS 116.1113 against the HOA pursuant to NRS 38.310.
5. Violation of procedural due process
SFR argues that Nationstar’s claim for violation of procedural due process should be dismissed because Nationstar has not pleaded a state actor as required under a procedural due process claim. (ECF No. 75 at 11-12). Additionally, SFR claims that the Nevada Supreme Court has ruled the statutory scheme' set forth in NRS Chapter 116 not violative оf due process. (ECF No. 75 at 13-14). The court’ disagrees.
The Ninth Circuit held that the Nevada legislature’s enactment of Chapter 116 constituted state action. Bourne Valley Court Trust v. Wells Fargo Bank, N.A.,
The facially unconstitutional provision, as identified in Bourne Valley, ex
However, to sustain a claim for violation of procedural due process, plаintiff must allege “(1) a liberty or property interest protected by the Constitution; (2) a deprivation of the interest by the government; (3) lack of process.” Portman v. County of Santa Clara,
In its complaint, Nationstar asserted its interest in a senior deed of trust encumbering the property. (ECF No. 1 at 4). Nationstar also alleged “[a]s a result of the April 4, 2014 HOA foreclosure sale SFR claims an interest in the property, and on information and belief, asserts SFR owns the property free and clear of the senior deed of trust.” (ECF No. 1 at 6). These allegations sufficiently establish the first two elements to a violation of procedural due process claim. See id.
Nationstar insufficiently alleged a lack of process. See id. Nationstar neither confirms nor denies actually having received any of NAS’ notices of trustee’s sale. See (ECF No 1). Rather, Na-tionstar alleges that, “the recorded notices, even if they were in fact provided, failed to describe the lien in sufficient detail as required by Nevada law.” (ECF No. 1 at 6). Nationstar states that the notices did not identify a super-priority amount, detail where or how to pay the amount, or detail the consequences of failing to pay (ECF No. 1 at 5). These allegations are insufficient to sustain a claim of violation of procedural due process. As offered above, procedural due process affords an interested party “notice reasonably calculated ... of the pendency of the action and ... an opportunity to present [an] objection.” Bourne Valley,
Taking as true the allegations in the complaint, Nationstar has not alleged a lack of process such that it had no notice to apprise it of the pendency of the action that would deprive it of its interest in the property. Therefore, the court will dismiss Nationstar’s claim of violation of procedural due process.
As Nationstar’s сlaim for declaratory relief/quiet title survives, the court turns its attention to the motions for summary judgment.
B. Motions for summary judgment
In its motion, SFR moves for summary judgment on its cross/counterclaims for
Under Nevada law, “[a]n action may be brought by any person against another who claims an estate or interest in real property, adverse to the person bringing the action for the purpose of determining such adverse claim.” Nev. Rev. Stat. § 40.010. “A plea to quiet title does not require any particular elements, but each party must plead and prove his or her own claim to the property in question and a plaintiffs right to relief therefore depends on superiority of title.” Chapman v. Deutsche Bank Nat’l Trust Co.,
SFR asserts that summary judgment in its favor is proper because, inter alia, the foreclosure sale extinguished Nationstar’s deed of trust pursuant to NRS 116.3116 and SFR Invs. Pool 1, LLC v. U.S. Bank, N.A.,
The HOA echoes some of SFR’s arguments in its motion for summary judgment, asserting that summary judgment is appropriate as to SFR’s quiet title action. (ECF No. 73). However, most of the issues that the HOA argues in its motion for summary judgment are moot because the claims have been dismissed. (ECF No. 73 at 1-2). The court will consider any arguments offered by the HOA as they relate to the remaining issues under quiet title.
The Banks contend that summary judgment in their favor is proper because the foreclosure sale was commercially unreasonable, the foreclosure sale is invalid because the notice scheme of NRS Chapter 116 is facially unconstitutional, and SFR Investments should not be applied retroactively. (ECF No. 70).
Notably, the Nevada Supreme Court has held that foreclosure of an HOA superpri-ority lien under Chapter 116 will extinguish all lower priority interests. See SFR Investments. If this court finds a properly conducted foreclosure sale, only through equity will Nationstar prevail. However, “a court of equity acts with caution.” Hurley v. Kincaid,
1. Nev. Rev. Stat. § 116.3116
NRS § 116.3116(1) gives an HOA a lien on its homeowners’ residences for unpaid assessments and fines; moreover, NRS 116.3116(2) gives priority to that HOA lien over all other liens and encumbrances with limited exceptions—such as “[a] first security interest on the unit recorded before the date on which the assessment sought to be enforced became delinquent.” Nev. Rev. Stat. § 116.3116(2)(b). The statute then carves out a partial exception to sub-paragraph (2)(b)’s exception for first security interests. See Nev. Rev. Stat. § 116.3116(2). In SFR Investments, the Nevada Supreme Court provided the following explanation:
As to first deeds of trust, NRS 116.3116(2) thus splits an HOA lien into two pieces, a superpriority piece and a subpriority piece. The superprioritypiece, consisting of the last nine months of unpaid HOA dues and maintenance and nuisance-abatement charges, is “pri- or to” a first deed of trust. The subpriority piece, consisting of all other HOA fees or assessments, is subordinate to a first deed of trust.
334 P,3d at 411 (Nev. 2014).
NRS Chapter 116 permits an HOA to enforce its superpriority lien by nonjudicial foreclosure sale. Id. at 416. Thus, “NRS 116.3116(2) gives an HOA a true superpri-ority lien, proper foreclosure of which will extinguish a first deed of trust.” Id. at 419; see also Nev. Rev. Stat. § 116.31162(1) (providing that “the association may foreclose its lien by sale” upon compliance with the statutory notice and timing rules).
The holder of a first deed of trust may pay off the superpriority interest to keep its interest from being extinguished upon foreclosure of an HOA superpriority lien. See SFR Investments,
2. Foreclosure deed recitals
SFR asserts that it has met its burden to show good title in itself because the foreclosure sale complied with NRS 116.3116 and SFR Investments, (ECF No. 71 at 10). SFR argues that the recorded foreclosure deed provides conclusive effect regarding the statutory prerequisites to a valid HOA lien foreclosure sale. (ECF No. 71 at 10). Thus, SFR maintains, the foreclosure sale extinguished Nationstar’s deed of trust as a matter of law. (ECF No. 71 at 9-13).
In response, the Banks argue that SFR’s reliance on the foreclosure deed’s recitals to prove—as a matter of law—that the foreclosure sale quiets title, is contrary to the court’s holding in Shadow Wood. (ECF No. 83 at 4-5). The Banks claim that the foreclosure deed’s recitals, as held in Shadow Wood, are conclusive proof only as to default, notice, and publication of the notice of sale; and are not conclusive as to commercial reasonableness. (ECF No. 83 at 4).
The court agrees with this argument. NRS 116.31166(1) provides:
1. The recitals in a deed made pursuant to NRS 116.31164 of:
(a) Default, the mailing of notice of delinquent assessment, and the recording of the notice of default and election to sell;
(b) The elapsing of the 90 days; and
(c) ' The giving of notice of sale,
Are conclusive proof of the matters recited.
Nev. Rev. Stat. § 116.31166(1),
NRS 116.31166’s enactment[] did not eliminate the equitable authority of the courts to consider quiet title actions when an HOA’s foreclosure deed contains conclusive recitals. We therefore reject [the] contention that NRS 116.31166 defeats, as a matter of law, [an] action to set aside the trustee’s deed and to quiet title in itself.
Shadow Wood,
Here, SFR has provided the recorded trustee’s deed upon sale (ECF No. 71-9), as well as the recorded notice of delinquent assessment lien (ECF No. 71-2 at 49), the recorded notice of default and election to sell (ECF No. 71-2 at 50), and
In light of the foregoing, the court will grant SFR’s motion for summary judgment as it relates to the foreclosure sale’s compliance with the statutory prerequisites set forth in NRS 116.31166. Importantly, these recitals’ conclusive effects “do not defeat equitable relief ... rather, such recitals are conclusive, in the absence of grounds for equitable relief” Shadow Wood,
3. Equitable relief
In Shadow Wood, the Nevada Supreme Court held that an HOA’s foreclosure sale may be set aside under a court’s equitable powers notwithstanding any recitals on the foreclosure deed where there is a “grossly inadequate” sales price and “fraud, unfairness, or oppression.”
i. Inadequate price
Nationstar argues that the purchase price of $16,000.00 in light of the $210,000.00 property appraisal value is grossly inadequate because the purchase price is 7.6% of the property’s value. (ECF No. 70 at 7). As support, Nationstar provides the appraisal report of Matthew Lu-bawy, wherein Lubawy concluded that on April 4, 2014, the property’s value was $210,000.00. (ECF No. 70-9 at 9).
The general rule requires a 20% sale price of fair market value to establish gross inadequacy. See Shadow Wood,
Here, the Banks have satisfied its initial burden as to gross inadequacy by setting forth the evidence that the property was purchased at the foreclosure sale for 7.6% of its market value. See (Lubawy report, ECF No. 70-9 at 9 (estimating a $210,000.00 property value on the foreclosure sale date); foreclosure deed, ECF No. 71-9 (indicating sale for $16,000.00)); see also Nationstar Mortg., LLC,
In response, SFR argues Lubawy’s expert report is faulty in that it failed to value the property in its current state. (ECF No. 87 at 8). SFR maintains that Lubawy “assumed fee simple property rights were being transferred, and assumed that ‘title is good and marketable’ when the reality facing the market was that lenders were potentially challenging title in subsequent litigation.” (ECF No. 87 at 8). To show this inadequacy, SFR offers its own rebuttal expert report indicating the sale price as an average one for homes sold at NRS 116 foreclosure sales. (ECF No 87-1 at 37).
ii Fraud, unfairness, or oppression
On a motion for summary judgment, the Banks must also demonstrate sufficient grounds to justify setting aside the foreclosure sale. In other words, inadequate price is not enough to warrant setting aside a foreclosure sale; there must also be a showing of fraud, unfairness, or oppression. See Shadow Wood,
The Banks attempt to claim that a grossly inadequate price alone is enough to show fraud, unfairness, or oppression. (ECF No. 70 at 5-7). The Banks rely on their assertion that the Nevada Supreme Court adopted the Restatement (Third) of Property: Mortgages in Shadow Wood to prove they have met their burden at trial. (ECF No. 70 at 5-7). In support, the Banks quote a parenthetical explanation, which quotes the Restatement, and attempt to pass it off as the court’s holding in Shadow Wood. (ECF No. 70 at 6).
The Shadow Wood court makes no such holding. Furthermore, no language exists in Shadow Wood that exhibits the Nevada Supreme Court’s intention to adopt the Restаtement. Compare Shadow Wood,
Because Nevada courts have not adopted the relevant section(s) of the Restatement at issue here, the Long test, which requires a showing of fraud, unfairness, or oppression in addition to a grossly inadequate sale price to set aside a foreclosure sale, controls. See
in. Bona fide purchaser
Moreover, when sitting in equity, “courts must consider the entirety of the circumstances .... This includes considering the status and actions of all parties involved including whether an innocent party may be harmed by granting the desirеd relief.” Shadow Wood,
A BFP is a person who purchases real property “for a valuable consideration and without notice of the prior equity, and without notice of facts which upon diligent inquiry would be indicated and from which notice would be imputed to him, if he failed to make such inquiry.” Bailey v. Butner,
Any purсhaser who purchases an estate or interest in any real property in good faith and for valuable consideration and who does not have actual knowledge, constructive notice of, or reasonable cause to know that there exists a defect in, or adverse rights, title or interest to, the real property is a bona fide purchaser.
Nev. Rev. Stat. § 111.180(1). “In other words, a later-obtained interest can prevail over an earlier-obtained interest where the later purchaser has no knowledge of the previous interest and records his interest first.” See Nationstar Mortg., LLC,
SFR argues that it paid value for the property and took without notice of a competing or superior interest in the property at the time of the foreclosure sale. (ECF No. 71 at 20-22). The Banks provide no competent evidence sufficient to raise a genuine dispute as to SFR’s status as a bonа fide purchaser. Rather, the Banks merely assert without adequate support that SFR is a professional property purchaser and concludes that such basis alone is sufficient to preclude SFR’s status as a BFP. (ECF No. 83 at 7-9). Such eonclusry allegations without specific facts supported by competent evidence are insufficient to raise a genuine issue for trial. See Celotex,
iv. Pre-foreclosure remedies
Because, when sitting in equity, “courts must consider the entirety of the circumstances,” this court turns its attention to the Banks’ pre-foreclosure actions. Shadow Wood,
Under NRS 116.31166(1), the holder of a first deed of trust may pay off the superp-riority portion of an HOA lien to prevent the foreclosure sale from extinguishing that security interest. See Nev. Rev. Stat. § 116.31166(1); see also SFR Investments,
The Banks did not tender, or even attempt to tender, the amount owed under any of the notices. Had the Banks paid the amount set forth in any of the notices (ECF No. 71-2 at 49, notice of delinquent assessment lien, total amount owed: $1,409.08; ECF No. 71-2 at 50, notice of default and election to sell, total amount owed: $2,632.74; ECF No. 71-2 at 55, notice of foreclosure sale, total amount owed: $4,106.60), the HOA’s interest would have been subordinate to the first deed of trust. See Nev. Rev. Stat. § 116.31166(1). Rather than tendering an amount and then later seeking a refund of any difference, the Banks decided to not tender any amount. See SFR Investments,
After failing to use the legal remedies available to them to prevent the property from being sold to a third party—for example, seeking a temporary restraining order and preliminary injunction and filling a lis pendens on the property {see Nev. Rev. Stat. §§ 14.010, 40.060)—the Banks now seek to profit from their own failure to follow the rules set forth in the statutes.
Not only have the Banks not provided evidence substantiating the fraud, unfairness, or oppression element under the Long test, but their pre-foreclosurе inac-tions weigh heavily against equitable relief. Weighing the totality of the circumstances at issue here, the court finds it inequitable to set aside the foreclosure sale.
4. Due process
In its motion, Nationstar asserts that the notice scheme of NRS Chapter 116 is facially violative of the due process clause; therefore, the foreclosure sale is invalid. (ECF No. 70 at 7-12).
The HOA and SFR argue that the foreclosure sale could not be unconstitutional because it lacked state action. (ECF Nos. 73 at 12, 87 at 18). They also contend that the constitutional avoidance doctrine applies such that the statute' is presumed constitutional. (ECF Nos. 73 at 15, 87 at 23). The court disagrees.
The Ninth Circuit held that NRS 116.3116’s “opt-in” notice scheme, which required an HOA to alert a mortgage lender that it intended to foreclose only if the lender had affirmatively requested notice, facially violated mortgage lenders’ constitutional due process rights. Bourne Valley,
This Court declines to follow the Nevada Supreme Court’s recent decision in Saticoy Bay LLC Series 350 Durango 1047 v. Wells Fargo Home Mortg.,
Nationstar’s claim, however, similarly fails. (ECF No. 70 at 7-12). The facially unconstitutional provision, as identified in Bourne Valley, exists in NRS 116.31163(2). Bourne Valley,
Nationstar has not suffered an injury related to the unconstitutional provision in NRS 116.31163(2). To raise question of constitutionality,' the party must have sufficient Article III standing, including, inter alia, a “personal injury fairly traceable to the ... allegedly unlawful conduct.” Raines v. Byrd,
Here, adequate notice was given to the interested parties prior to extinguishing a property right. Nationstar recorded its interest in the property on October 1, 2013. (EOF No. 1-3). Prior to this recording, on August 19, 2013, the HOA notified interested parties of the potential foreclosure by sending them a notice of default and election to sell. (EOF No. 40-2), Nations-tar was not entitled to this notification because, on August 19, 2013, Nationstar had not yet recorded its property interest.' (EOF No. 1-3).
After Nationstar recorded its interest in the property, it received adequate notice to satisfy due process. On February 10, 2014, the HOA again notified interested parties—this time including Nationstar—by sending them a recorded notice of trustee’s sale. (EOF Nos. 40 at 2, 40-3). The notice of trustee’s sale included (1) the name, address, and telephone number of the trustee conducting the sale, (2) the property at issue, (3) the time, date, and location that the sale will occur, and (4) the amount owed to satisfy the lien. (EOF Nos. 40 at 2, 40-3 at 3). Whereas notice by mail to ensure actual notice is the minimum constitutional requirement, the notice here specifically laid out procedures to prevent extinguishment of the property interest. See Mennonite,
As a result, the notice of trustee’s sale was sufficient notice to cure any constitutional defect inherent in NRS 116.31163(2) because it put Nationstar on notice that its interest was subject to pendency of actiоn and offered all of the constitutionally required information. Therefore, the court will deny Nationstar’s motion for summary judgment as it relate to the quiet title issue of due process.
5.Retroactive application of SFR Investments
Nationstar posits that the court should not apply SFR Investments retroactively to extinguish its deed of trust. (EOF No. 70 at 12).
The Nevada Supreme Court has since applied the SFR Investments holding in numerous cases that challenged pre-SFR Investments foreclosure sales. See, e.g., Centeno v. Mortg. Elec. Registration Sys., Inc., No. 64998,
6,Preliminary & permanent injunction
SFR requests that the Banks and the borrowers be enjoined from any sale or transfer that would affect SFR’s title to the property. (EOF No, 71 at 14).
As discussed above, the court follows the' well-settled rule that a claim for “injunc-tive relief’ standing alone'is not a cause of action. Thus, the court will dismiss this claim.
7.Slander of title
Under Nevada law, a slander of title claim involves (1) false and mali
Further, a “plaintiff alleging a claim for slander of title must meet a heightened pleading standard.” See, e.g, Velazquez v. Mortg. Elec, Registration Sys., Inc., No. 2:11-CV-576 JCM CWH,
Here, SFR fails to assert any words spoken by the Banks, let alone any false words spoken by them. SFR relies on the recorded assignments, arguing that the statements contained therein were false, but fails to provide any evidence that these recordings were maliciously filed. Further, while SFR asserts that the Banks knew that the deed of trust was extinguished because of SFR Investments, the Banks initiation of the instant action for declaratory relief suggests the contrary.
Accordingly, SFR has failed to show that it is entitled to judgment as to this claim, and the court will deny SFR’s motion for summary judgment on its slander of title claim.
IV. Conclusion
Based on the foregoing, the court will grant the HOA’s motion to dismiss (ECF No. 75) without prejudice as to claims (2) through (4) of Nationstar’s complaint (ECF No. 1), but deny the motion as to Nationstar’s quiet title claim.
Further, the court will grant SFR’s motion for summary judgment (ECF No. 71) as to its quiet title claim against the Banks and the borrowers, but deny the motion as to the slander of title claim; the court will dismiss SFR’s claim for injunctive relief. SFR has met its burden of demonstrating that there is no genuine dispute of material fact as to its quiet title claim against the Banks and borrowers and is entitled to judgment as a matter of law. Thus, SFR is entitled to a declaratory judgment that the Banks’ first deed of trust was extinguished pursuant to the properly conducted foreclosure sale, where SFR purchased the property for value in the amount of $16,000.00.
Furthermore, the court will deny the Banks’ motion for summary judgment.
Accordingly,
IT IS HEREBY ORDERED, ADJUDGED, and DECREED that the HOA’s motion to dismiss (ECF No. 75) be, and the same hereby is, GRANTED IN PART and DENIED IN PART, consistent with the foregoing.
IT IS FURTHER ORDERED that the Banks’ motion for summary judgment (ECF No. 70) be, and the same hereby is DENIED.
IT IS FURTHER ORDERED that SFR’s motion for summary judgment (ECF No. 71) be, and the same hereby is, GRANTED IN PART and DENIED IN PART, consistent with the foregoing. .
IT IS FURTHER ORDERED that the HOA’s motion for summary judgment (ECF No. 73) be, and the same hereby is, GRANTED IN PART and DENIED IN PART, consistent with the foregoing.
IT IS FURTHER ORDERED that SFR’s response to the HOA’s motion to dismiss (ECF No. 78), and the HOA’s reply to SFR’s response (ECF No. 82) be, and the same hereby is, STRICKEN.
Notes
. SFR's response to the HOA’s motion to dismiss (ECF No. 78) was made without leave of court and is violation of Local Rule 7-2. The сourt will strike SFR’s response to the motion to dismiss and the HOA’s reply to that response (ECF No. 82). See, e.g., Ready Transp., Inc. v. AAR Mfg., Inc.,
. The HOA filed supplemental authorities (ECF No. 96) without leave of court and is in violation of Local Rule 7-2. The court will strike the HOA’s supplemental briefing. See, e.g,, Ready Transp., Inc. v. AAR Mfg., Inc.,
. The 2015 Legislature substantially revised Chapter 116. 2015 Nev. Stat., ch. 266. Because Chapter 116 operates by allowing a foreclosure sale only after specific conditions are met, the court must look at the statutes in effect on the day of the sale: April 4, 2014. See Nev. Rev. Stat. § 116.31162 (providing that the association may foreclose its lien by sale after all of the statutory provisions occur); Saticoy Bay LLC Series 2021 Gray Eagle Way v. JPMorgan Chase Bank, N.A.,
. As an initial matter, the court takes judicial notice of the following recorded documents: first deed of trust (ECF No. 71-2 at 16-44); assignment of deed of trust (ECF No. 71-2 at 45-46; assigning the first deed of trust to Deutsche); assignment of deed of trust (ECF No. 71-2 at 47-48; assigning the first deed of trust to BNYM); assignment of deed of trust (ECF No. 71-2 at 52-116; assigning the first deed of trust to Nationstar); notice of delinquent assessment (ECF No. 71-2 at 49); notice of default and election to sell (ECF No. 71-2 at 50-51); notice of trustee’s sale (ECF No. 71-2 at 54-55); and foreclosure deed (ECF No. 71-9). See, e.g., United States v. Corinthian Colls.,