Nationstar Mortgage Llc v. Springs Property Owners Association et al

MOTION for Summary Judgment

D. Neb.April 18, 2017

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Edward D. Boyack, Esq. Nevada Bar No. 5229 Colli C. McKiever, Esq. Nevada Bar No. 13724 BOYACK ORME & ANTHONY 401 N. Buffalo Drive #202 Las Vegas, Nevada 89145 ted@boyacklaw.com colli@boyacklaw.com 702.562.3415 702.562.3570 (fax) Attorneys for Springs Property Owners Association UNITED STATES DISTRICT COURT DISTRICT OF NEVADA NATIONSTAR MORTGAGE LLC, Plaintiff, vs. THE SPRINGS PROPERTY OWNERS ASSOCIATION; and SFR INVESTMENTS POOL 1, LLC, Defendants. Case No.: 2:16-cv-02013-JCM-NJK THE SPRINGS PROPERTY OWNERS ASSOCIATION’S MOTION FOR SUMMARY JUDGMENT SFR INVESTMENTS POOL 1, LLC, a Nevada limited liability company, Counter/Cross-Claimant, vs. NATIONSTAR MORTGAGE LLC; ALBERTO D. DACAYANAN, JR., an individual; SAMANTHA A. DACAYANAN, an individual;, Counter/Cross-Defendants. Page 1 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 1 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 THE SPRINGS PROPERTY OWNERS ASSOCIATION’S MOTION FOR SUMMARY JUDGMENT COMES NOW the Defendant, THE SPRINGS PROPERTY OWNERS ASSOCIATION, by and through its counsel of record, the law firm Boyack Orme & Anthony, hereby files this Motion for Summary Judgment. This Motion is made pursuant to FRCP 56, the attached pleadings and papers on file, including a Memorandum of Points and Authorities, and such further oral argument as the Court may hear. Dated this 18th day of April, 2017 BOYACK ORME & ANTHONY By: /s/ Edward D. Boyack Edward D. Boyack, Esq. Nevada Bar No. 5229 Colli C. McKiever, Esq. Nevada Bar No. 13724 401 N. Buffalo Dr. #202 Las Vegas, NV 89145 Attorneys for Springs Property Owners Association MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION The claims of Plaintiff Nationstar Mortgage LLC (hereinafter “Nationstar”), allegedly arise from the events surrounding the HOA foreclosure sale of the residential property commonly known as 1056 Chip Court, Minden, NV 89423, Douglas County APN 1420-08-313-002 (hereinafter “Property”) within The Springs Property Owners Association (hereinafter “HOA”), formerly owned by Alberto Dacayanan, Samantha Dacayanan, Alberto I Dacayanan, and Adela Dacayanan (hereinafter collectively, “Dacayanans”), and subject to deed of trust in favor of Nationstar. On or about January 10, 2014, Phil Frink & Associates (hereinafter “Frink”), as the HOA’s collection agent, completed the HOA foreclosure sale of the Property on behalf of the HOA based upon delinquent Association assessments. The HOA foreclosed upon the property Page 2 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 2 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and a deed in foreclosure of assessment lien in favor of the HOA was recorded on January 17, 2014. The HOA recorded its transfer of the Property to Defendant and Counter/Cross-Claimant, SFR Investments Pool 1, LLC (hereinafter “SFR”), by a quitclaim deed on April 18, 2014. Nationstar filed this action seeking judicial determination that its deed of trust was not extinguished pursuant to the non-judicial foreclosure of the Property. Nationstar’s Complaint on file names the HOA as Defendant for the following causes of actions: (1) Quiet Title/Declaratory Judgment, (2) Breach of NRS 116.1113, and (3) Wrongful Foreclosure. The HOA makes no comment on Nationstar’s cause of action for Injunctive Relief as such action was not directed at the HOA. The HOA is entitled to Summary Judgment because the Property was obtained by the HOA and later quit claimed to SFR by way of a properly noticed and valid foreclosure process pursuant to NRS Chapter 116 and each of the substantive claims asserted by Nationstar against the HOA all fail as a matter of law. Therefore, Nationstar has no viable claims against the HOA and the Court should grant summary judgment in the HOA’s favor. II. STATEMENT OF THE FACTS The relevant facts are, to-wit: 1. On or about March 6, 2006, the Dacayanans recorded a deed of trust with the Douglas County Recorder attached hereto as Exhibit A. 2. On or about April 21, 2011, Frink, on behalf of the HOA, recorded a Notice of Delinquent Assessment Lien with the Douglas County Recorder in the amount of $557.96 (Five Hundred Fifty Seven Dollars and Ninety Six Cents) attached hereto as Exhibit B. 3. On or about October 10, 2012, Frink, on behalf of the HOA, recorded a Notice of Default and Election to Sell with the Douglas County Recorder in the amount $3,055.09 (Three Thousand Fifty Five Dollars and Nine Cents) attached hereto as Exhibit C. 4. On or about November 6, 2013, Frink, on behalf of the HOA, recorded a Notice of Homeowners Association Sale with the Douglas County Recorder in the amount of $5,874.51 (Five Thousand Eight Hundred Seventy Four Dollars and Fifty One Cents) attached hereto as Exhibit D. Page 3 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 3 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5. On or about January 17, 2014, the HOA obtained title of the Property by recording a Deed in Foreclosure of Assessment Lien with the Douglas County Recorder in the amount of $450.00 (Four Hundred and Fifty Dollars) attached hereto as Exhibit E. 6. On or about April 18, 2014, Frink, on behalf of the HOA, transferred the HOA’s interest in the Property to SFR by recording a Quit Claim Deed with the Douglas County Recorder in the amount of $22,500.00 (Twenty Two Thousand Five Hundred Dollars) attached hereto as Exhibit F. III. STANDARD The Federal Rules of Civil Procedure provide: "A party against whom relief is sought may move at any time, with or without supporting affidavits, for summary judgment on all or part of the claim. Fed. R. Civ. Pro. 56(b). The rule further states: The judgment sought should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-51, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A material fact is one that, "under the governing substantive law ... could affect the outcome of the case." Thrifty Oil Co. v. Bank of America Nat'l Trust & Savings Ass'n, 322 F.3d 1039, 1046 (9th Cir. 2003) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). There is no genuine issue of fact if the opposing party fails to offer evidence sufficient to establish the existence of an element essential to that party's case. Celotex, 477 U.S. at 322, 106 S.Ct. at 2552; Citadel Holding Corp. v. Roven, 26 F.3d 960, 964 (9th Cir.1994). A nonmoving party cannot avoid summary judgment by relying only on conclusions or allegations unsupported by factual evidence. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Where the party moving for summary judgment will not bear the burden of proof at trial, it may support submitting evidence to negate the plaintiff's case or by merely "pointing out . . . that there is an absence of evidence to support the nonmoving party's case." Cuzze v. Univ. & Cmty. College Sys., 123 Nev. 598, 603-604 (2007) (adopting Celotex Corp. v. Catrett, 477 U.S. Page 4 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 4 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 317, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)). In deciding upon a motion for summary judgment, all facts and all inferences must be viewed by the court in the light most favorable to the nonmoving party. See Amerson v. Clark Cnty.,995 F.Supp. 2d 1155,1159 (D. Nev. 2014) (citing Kaiser Cement Corp. v. Fischbach & Moore, lnc.,793 F.2d 1100, 1103 (9th Cir. 1986)). A motion for summary judgment will be granted if the moving party has demonstrated the absence of any issue of material fact and the right to judgment as a matter of law. Poller v. Columbia Broadcasting System, Inc., 386 U.S. 464, 82 S.Ct. 486, 7 L.Ed. at 458 (1962); Mutual Fund Investors, Inc. v. Putman Management Co., 553 F.2d 620 (9th Cir. 1977). IV. ARGUMENT A. Nationstar’s Deed of Trust was extinguished by the foreclosure sale. The ability of an HOA foreclosure sale to extinguish a first deed of trust is set forth in NRS 116 and has been upheld by the Nevada Supreme Court. SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014). In SFR Investments, the Court found that NRS 116.3116(2) "gives an HOA true super-priority lien, proper foreclosure of which will extinguish a first deed of trust." Id. at 412. (Court finding that "[a] trustee's deed reciting compliance with the notice provisions of N.R.S. 116.31162 through N.R.S. 116.31168 'is conclusive' as to the recitals 'against the unit's former owner, his or her heirs and assigns, and all other persons.'"). In this case before the Court, the Dacayanans failed to timely pay assessments payments to the HOA. Due to that failure, the HOA, through Frink, caused to be filed the requisite notices to pursue a foreclosure action upon the subject property. The HOA's foreclosure of the assessment lien pursuant to N.R.S. 116.31162 through N.R.S. 116.31168, as evidenced by the filing of the Foreclosure Deed in favor of the HOA, establishes the HOA’s ownership in the Property prior to transferring to SFR by quit claim deed, and effectively eliminates Nationstar’s interest. See Shadow Wood Homeowners Ass'n, Inc. v. New York Cmty. Bancorp, Inc., 366 P.3d 1105, 1116 (Nev. 2016) (en banc) (The Court finding that "if the association forecloses on its superpriority lien portion, the sale also would extinguish other subordinate interests in the property.") Accordingly, because the HOA complied with the provisions of NRS 116 and the recitals in the Foreclosure Deed are conclusive, Nationstar’s deed of trust was extinguished by Page 5 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 5 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 operation of law. B. Nationstar's constitutional challenges to the foreclosure statute fail. The Nevada Supreme Court has already interpreted the Nevada foreclosure statute to be valid as applied to HOA foreclosures. See SFR Investments at 408. Nationstar relies upon the recently decided case of Bourne Valley Trust v. Wells Fargo Bank N.A., 2016 WL 4254983 (9th Cir., August 12, 2016), as the basis of establishing that the Nevada foreclosure statute is unconstitutional. The determination by the Ninth Circuit Court of Appeals in the Bourne Valley case, finding NRS 116 facially unconstitutional, directly contradicts the decision by the Nevada Supreme Court in SFR Investments. "The constitutionality of a state statute is a question of law." Planned Parenthood of Idaho, Inc. v. Wasden, 376 F.3d 908, 920 (9th Cir. 2004) citing In re Kolb, 326 F.3d 1020, 1037 (9th Cir. 2003) (Court acknowledging that in "construing a state statute" the federal court's "role is to interpret the law" as the state's highest court would interpret the statute.). As this case is among hundreds of cases filed concerning title to properties sold at a homeowner's association lien foreclosure sale under NRS Chapter 116, it is imperative that the result of factually similar cases not be dictated primarily by where the matter is filed. The Supreme Court of the United States has long recognized the necessity that the outcome of litigation be essentially the same whether the case is filed in state or federal court as to preclude forum shopping. See Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938). "Where a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court." Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 427-8 (1996); quoting Guaranty Trust Co. v. York, 326 U.S. 99, 109 (1945).; see also Ragan v. Merchants Transfer & Warehouse Co., 337 U.S. 530, 533 (1949). Federal courts sitting in diversity jurisdiction hearing a matter involving state law have traditionally deferred to the supreme court of that state's interpretation of the state statute. See Bernhardt v. Polygraphic Co., 350 U.S. 198, 204 (1956) citing Guaranty Trust Co. v. York, 326 Page 6 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 6 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 U.S. 99, 108 (1945) (Court finding that a decision of the federal court should not "substantially affect the enforcement of the right as given by the State.") As the Nevada Supreme Court has interpreted the foreclosure statute, finding that it does not violate the notice provisions of procedural due process, Nationstar's claims that NRS Chapter 116 violates the due process clause contained within the Fourteenth Amendment of the United States Constitution and the Nevada Constitution are without merit. 1. Nationstar had actual notice of the HOA foreclosure sale. Nationstar's receipt of actual notice of the HOA foreclosure sale invalidates Nationstar’s allegation that it was deprived of procedural due process. A procedural due process claim requires allegations of, "(1) a deprivation of a constitutionally protected liberty or property interest, and (2) a denial of adequate procedural protections." Brewster v. Bd. of Educ. of Lynwood Unified Sch. Dist., 149 F.3d 971, 982 (9th Cir. 1998). Additionally, Nationstar’s receipt of actual notice negates the claim that NRS Chapter 116 is facially unconstitutional. See Wiren v. Eide, 542 F.2d 757, 762 (9th Cir. 1976) ("receipt of actual notice deprives [appellant] of standing to raise the claim" that the statutory notice provisions violated due process). The key fact is that Nationstar had notice of the HOA's foreclosure sale but chose to not take action to preserve its interest in the Deed of Trust. "[l]t is well established that due process is not offended by requiring a person with actual, timely knowledge of an event that may affect a right to exercise due diligence and take the necessary steps to preserve that right." SFR Investments at 418, citing In re Medaglia, 52 F,3d 451,455 (2d Cir. 1995). Whether the notice requirements contained within NRS Chapter 116 are sufficient or not do not alter the fact that Nationstar was provided actual notice of the HOA foreclosure sale. A due process violation does not occur if actual notice is given to the interested party. See United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 272, 130 S.Ct. 1367, 1378 (2010) (no due process violation where the party in interest received actual notice.). Further, the Nevada statute does not require interested parties to opt-in. The provisions requiring notice to lenders are incorporated into NRS Chapter 116 by NRS 116.31168. Pursuant to SFR Investments, "'[t]he provisions of NRS 107.090,' governing notice to junior lienholders Page 7 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 7 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and others in deed-of-trust foreclosure sales, 'apply to the foreclosure of an association's lien as if a deed of trust were being foreclosed.’” SFR Investments, 334 P .3d at 411. Accordingly, NRS 107.090 requires that copies of the notice of default and election to sell, and the notice of sale, be mailed to each "person with an interest or claimed interest" that is "subordinate" to the HOA's super-priority lien. NRS 107.090(3)-(4). The currently applicable interpretation of NRS Chapter 116 as rendered by the Nevada Supreme Court held that the lender's due process rights are not violated where the foreclosure on an HOA super priority lien extinguishes all junior liens, including a first deed of trust recorded prior to the notice of delinquent assessments, thereby upholding the constitutionality of the foreclosure statute. SFR Investments, 334 P.3d at 418. Because Nationstar received actual notice of the HOA's foreclosure sale, Nationstar had the opportunity to protect its Deed of Trust, but elected not to take such action. The actual notice provided to Nationstar negated its argument that a due process violation occurred. Therefore, Nationstar's claim that it was damaged by the purportedly facially unconstitutional statute fails as a matter of law. 2. The HOA is not a state actor. Nationstar argues that the HOA foreclosure sale equates to a deprivation of property under the Due Process clause of the 14th Amendment of the United States Constitution. A violation of due process or deprivation of Nationstar's property must be caused by a state action and a state actor. JP Morgan Chase Bank v. SFR Investment Pool 1, Case No. 2:14-cv-02080-RFB (D. Nev. July 28, 2016) ("The Fourteenth Amendment protects citizens from unlawful action by the government, but does not regulate the conduct of private individuals or entities.") (citing Apao v. Bank of New York, 324 F.3d 1091, 1093 (9th Cir. 2003). Due process protections do not extend to private actor's private conduct. Am. Mfr. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 50, 119 S.Ct. 977 (1999). Rather, the actor must be performing functions that are traditionally and exclusively performed by the government. Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 158 (1978). "Embedded in our Fourteenth Amendment jurisprudence is a dichotomy between state action, which is subject to scrutiny under the Amendment's Due Process Clause, and private conduct, against which the Amendment affords no shield, no matter how Page 8 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 8 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 unfair that conduct may be." National Collegiate Athletic Association v. Tarkanian, 488 U.S. 179, 191 (1988) citing Shelley v. Kraemer, 334 U.S. 1, 13 (1948). Otherwise the Fourteenth Amendment does not address "private conduct abridging individual rights." Id., citing Burton v. Wilmington Parking Authority, 365 U.S. 715, 722 (1961). The "State is responsible for the [...] act of a private party when the State, by its law, has compelled the act." Adickes v. S.H Kress & Co. 398 U.S. 144, 170 (1970). The HOA foreclosure sale, in which the bank received actual notice of the proceeding, does not implicate procedural due process issues. 3. Nationstar's facial challenge to NRS 116 is not valid. In order to successfully challenge the constitutionality of a statute, it must be established that no circumstances exist under which the statute would be valid. U.S. v . Salerno, 481 U.S. 739, 745 (1987). "Statutes are presumed to be valid, and the challenger bears the burden of showing that a statute is unconstitutional." Flamingo Paradise Gaming, LLC v. Chanos, 125 Nev. 502, 509, 217 P.3d 546, 551 (Nev. 2009) (quoting Silvar v. Dist. Ct., 122 Nev. 289, 292, 129 P.3d 682, 684 (Nev. 2006)). In order to succeed on a facial challenge of NRS Chapter 116, Nationstar must establish that there is, "no set of circumstances under which the statute would be valid." Deja vu Showgirls v. State Dept. of Tax, 334 P.3d 392, 398 (Nev. 2014). It has already been determined that NRS Chapter 116 is not unconstitutional on its face as at least one set of circumstances exist under which the statute is valid. The Nevada Supreme Court, considering a facial challenge to NRS Chapter 116, found, "[t]o the extent U.S. Bank argues that a statutory scheme that gives an HOA a super-priority lien that can be foreclosed non-judicially, thereby extinguishing an earlier filed deed of trust, offends due process, the argument is a nonstarter." SFR Investments at 418. Based upon the Nevada Supreme Court's determination that at least one set of circumstances exist in which the statute is valid, Nationstar's argument contesting the validity of the statute on its face must fail. C. The foreclosure sale was commercially reasonable. There is no requirement of commercial reasonableness in HOA non-judicial foreclosure sales conducted pursuant to NRS Chapter 116, but even if there was, the sale was commercially reasonable. First, the foreclosure price was sufficient. Secondly, there is no evidence that the sale Page 9 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 9 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 price was the result of fraud, oppression or unfairness. Lastly, Nevada has found that low sales price alone is never enough to unwind a sale. NRS § 116.31164 and 116.31166 and supporting provisions lack any requirement that the sale be "commercial reasonable." See Pro-Max Corp. v. Feenstra, 117 Nev. 90, 95, 16 P.3d 1074, 1077-78 (2001) ("where the language of a statute is plain and unambiguous and its meaning clear and unmistakable, there is no room for construction, and the courts are not permitted to search for its meaning beyond the statute itself."). When evaluating the commercial reasonableness of a sale, the Nevada Supreme Court has already determined that an allegation of inadequate sales price alone is insufficient to set aside a foreclosure sale: "There must also be a showing of fraud, unfairness, or oppression." Shadow Wood Homeowners Association, Inc. v. New York Community Bancorp, Inc., P.3d 1105, 1112 (Nev. 2016) (citing Long v. Towne, 98 Nev. 11, 13, 639 P.2d 528, 530 (1982)); see Golden v . Tomiyasu, 79 Nev. 503, 518, 387 P.2d 989, 997 (1963) (adopting the California rule that "inadequacy of price, however gross, is not in itself a sufficient ground for setting aside a trustee's sale legally made; there must be in addition proof of some element of fraud, unfairness or oppression as accounts for and brings about the inadequacy of price." (Internal citations omitted). A panel of the Nevada Supreme Court recently reiterated the Shadow Wood decision stating in an unpublished opinion that "a low sales price is not a basis for voiding a foreclosure sale absent 'fraud, unfairness, or oppression..." Centeno v. JPMorgan Chase Bank, N.A., Case No. 67365 (Nev. Mar. 18, 2016). 1. The foreclosure price of the property was sufficient. The entirety of the circumstances surrounding the sale of the property must be considered to analyze the sufficiency of the sales price of the property. As the court in Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 80 F.Supp.3d 1131 (D.Nev. 2015) recognized, when assessing commercial reasonableness of an association sale, the material facts affecting the specific market at the time must be considered, including the split in the courts as to the interpretation of NRS 116.3116(2), and whether there was evidence of fraud, oppression or unfairness. "Before the Nevada Supreme Court issued SFR Investments Page 10 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 10 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 purchasing property at an HOA foreclosure sale was a risky investment, akin to purchasing a lawsuit…. a purchaser at an HOA foreclosure sale risked purchasing merely a possessory interest in the property subject to the first deed of trust. . . . Given these risks, a large discrepancy between the purchase price a buyer would be willing to pay and the assessed value of the property is to be expected." Bourne Valley at 1136. Even if the price obtained was lower than the amount that Nationstar claims the property should have sold for, that is not determinative of the issue. A central concept to the analysis of commercial reasonableness deals with looking at whether there was a conduct in the sale process that led to the low price, not simply comparing price to value. See Iama Corp. v. Wham, 99 Nev. 730, 735-738, 669 P.2d 1076, 1079 (1983) (must look to the sale process, i.e., "whether proper notice was given, whether the bidding was competitive, and whether the sale was conducted pursuant to...normal procedures"). 2. Nationstar has presented no evidence of fraud, unfairness or oppression. It is well settled that inadequate sales price alone is insufficient to set aside a foreclosure sale; "there must also be a showing of fraud, unfairness, or oppression." Shadow Wood, 366 P.3d at 1105, (citing Long, 98 Nev. At 13, 639 P.2d at 530); see Golden, 79 Nev. 504, 514, 387 P.2d at 995 ("inadequacy of price, however gross, is not in itself a sufficient ground for setting aside a trustee's sale legally made; there must be in addition proof of some element of fraud, unfairness or oppression as accounts for and brings about the inadequacy of price." (Internal citations omitted). The facts presented by Nationstar there are no allegations of fraud, oppression or unfairness that brought about any inadequacy in price. Further, the considering the context of the transaction, including: the uncertainty of the law at the time of the sale; the compliance with the noticing requirements; and the lack of any factual allegations of fraud, unfairness or oppression; the sale was commercially reasonable and the HOA is entitled to summary judgment. D. Nationstar's claim for wrongful foreclosure is without merit. "An action for the tort of wrongful foreclosure will lie if the trustor or mortgagor can establish that at the time the power of sale was exercised or the foreclosure occurred, no breach of condition or failure of performance existed on the mortgagor's or trustor' s part which would Page 11 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 11 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 have authorized the foreclosure or exercise of the power of sale." Larson v. Homecomings Fin., LLC, 680 F. Supp. 2d 1230, 1237 (D. Nev. 2009) (citing Collins v. Union Federal Sav. & Loan Ass'n, 99 Nev. 284, 662 P.2d 610, 623 (1983)). "The material issue of fact in a wrongful foreclosure claim is whether the trustor was in default when the power of sale was exercised." Id. The facts are undisputed that the HOA had the right to foreclose upon its lien because the prior owners failed to timely pay assessments upon the property. Under NRS Chapter 116, the CC&R's must establish an association’s ability to impose assessments in order for the association to be entitled to collect the same. NRS 116.3102 allows for an HOA to "collect assessments for common expenses" as the HOA has designated in the governing declarations of the community, namely the CC&R's. The CC&R's, through the statutory grant of authority, govern the establishment and imposition of the assessments against the property owners within the association. The CC&R's provide the authority to the HOA to impose and enforce the rules of the community and to establish and collect the assessments of the association. See NRS 116.3102. Due to the Dacayanan’s failure to pay the HOA assessments, the HOA was entitled to foreclose upon the property. Nationstar has failed to set forth a cause of action for wrongful foreclosure, and, therefore, the HOA is entitled to summary judgment. E. The HOA did not breach any duty under NRS 116.1113. There is an obligation to act in good faith is implicit in the performance of every contractual obligation pursuant to NRS Chapter 116. "Good faith," means honesty in fact and the observance of reasonable commercial standards of fair dealing. NRS 104.120l(t). However, Nationstar does not assert that it was a party to a contract with the HOA. Therefore, this is where the analysis on the claim of the breach of the HOA's duty of good faith should end as the HOA does not owe Nationstar a duty pursuant to the statute. However, to the extent that Nationstar set forth allegations that the HOA or the HOA's Trustee failed to provide the exact super-priority amount of the assessment lien as a basis of the breach of good faith, there is no requirement of such disclosure. The fact that a notice does not identify a super-priority amount is of no consequence because NRS Chapter 116 gives lienholders notice that the HOA may have a super-priority interest that could extinguish their Page 12 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 12 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 security interests. See SFR Investments at 418. Just as the Nevada Supreme Court found in SFT, nothing in this case stopped Nationstar "from determining the precise super-priority amount in advance of the sale or paying the entire amount and requesting a refund of the balance." Id. This issue that that the notices did not containing the exact super-priority amount is without merit as it was already decided by the Nevada Supreme Court, the HOA is entitled to summary judgment as a matter of law. Further, Nationstar also raises the claim that the HOA's CC&R's represent that the HOA's assessment lien would be subordinate to Nationstar's Deed of Trust. Specifically, as to statues pertaining to NRS Chapter 116, Nevada law provides that, "provisions may not be varied by agreement, and rights conferred by it may not be waived . . . [e]xcept as expressly provided in Chapter 116." See NRS 116.1104. There is no explicit language in NRS 116.3116 that allows the waiver of the HOA's super-priority position for the HOA's super-priority assessment lien. SFR Investments at 419, citing 7912 Limbwood Court Trust v. Wells Fargo Bank, 979 F. Supp. 2d 1142, 1153 (D.Nev. 2013). The Nevada Supreme Court has invoked the statute when analyzing the applicability of the mortgage savings clause and found the clause in that instance "does not affect NRS 116.3116(2)'s application…". SFR Investments at 419; See Boulder Oaks Cmty. Ass'n v. B & J Andrews Enters., LLC, 125 Nev. 397, 407, 215 P.3d 27, 34 (2009) ("holding that a CC&Rs clause that created a statutorily prohibited voting class was void and unenforceable"). Clearly under Nevada statutory law the HOA cannot alter the HOA's position as the right to collect pursuant to the assessment lien, despite the interpretation by Nationstar of the CC&R's to the contrary. F. Nationstar failed to act to prevent the HOA foreclosure sale. Nationstar's Complaint seeks a finding by this court that its Deed of Trust remains a lien upon the premises and further asserts allegations that it is entitled to recover monetary damages for the HOA foreclosing upon the property. What Nationstar glaringly fails to allege is why it did not take action to prevent the HOA foreclosure sale. Unlike the purchaser at the foreclosure sale that is arguing to own the premises free and clear of Nationstar's lien, the HOA does not have that same benefit riding on the outcome of this litigation. Rather, because the Dacayanans Page 13 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 13 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 failed to timely pay the HOA assessments to the HOA as the assessments become due and owing to the HOA, it took action to recover the past due assessment amounts owed upon the property. Nationstar is now making arguments that despite the payment Nationstar never made, it was willing to send the HOA the super-priority amount. The underlying issue that Nationstar never addresses is that Nationstar obviously knew of the upcoming HOA foreclosure sale in plenty of time prior to the sale date to take steps to protect its interest, such as attend the foreclosure sale, pay the entire amount demanded in the Notice of Delinquent Assessment lien and later demand a refund of any excess amount paid, seek to enjoin the sale, or bid on the property at the foreclosure auction. Even further, Nationstar's speculation as to what would have occurred if Nationstar had attempted to tender the assessment payment to the HOA is irrelevant. See Nationstar’s Complaint ¶ 22. Nationstar could have tendered the super-priority amount to protect their deed of trust, but failed to do so. Instead, Nationstar failed to take action until Nationstar commenced this litigation over two years after the foreclosure sale was conducted. As a general rule, a party cannot recover damages for losses that a reasonable effort could have avoided. Conner v. Southern Nevada Paving, 103 Nev. 353, 355, 741 P.2d 800, 801 (Nev. 1987). As Nationstar undeniably received notices of the HOA foreclosure sale, Nationstar had ample time and plenty of opportunities to prevent the foreclosure sale. The Nevada Supreme Court has taken the position that, to preserve the interest in the property, the holder of a deed of trust cannot merely do nothing, even if it believes it has satisfied the super-priority portion of the HOA' s lien. See Shadow Wood Homeowners Ass'n, Inc. v. New York Cmty. Bancorp, Inc., 366 P.3d 1105 (Nev. 2016) (en banc). Because the HOA does not agree that the overture of just sending a letter to the HOA Trustee is enough to satisfy the super-priority lien, Nationstar cannot rely upon that letter to preserve its interest. It is clear that Nationstar must act to protect its security interest. Accordingly, because the HOA complied with the provisions of NRS 116 and Nationstar, despite having actual notice of the HOA's foreclosure action, did nothing to protect its interest, Nationstar's Deed of Trust was extinguished by operation of law. . . . . Page 14 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 14 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 V. CONCLUSION There are no genuine issues of material fact in this case. For the foregoing reasons, the Court should grant the HOA’s Motion for Summary Judgment. DATED this 18th day of April, 2017. BOYACK ORME & ANTHONY By: /s/ Edward D. Boyack Edward D. Boyack, Esq. Nevada Bar No. 5229 Colli C. McKiever, Esq. Nevada Bar No. 13724 401 N. Buffalo Dr. #202 Las Vegas, NV 89145 Attorneys for Springs Property Owners Association Page 15 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 15 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 INDEX OF EXHIBITS EXHIBIT A Deed of Trust EXHIBIT B Notice of Delinquent EXHIBIT C Notice of Default EXHIBIT D Notice of Homeowners Association Sale EXHIBIT E Deed in Foreclosure EXHIBIT F Quit Claim Deed CERTIFICATE OF SERVICE I certify that I am an employee of Boyack Orme & Anthony, and that on this 18th day of April, 2017, I served a true and correct copy of the foregoing THE SPRINGS PROPERTY OWNERS ASSOCIATION’S MOTION FOR SUMMARY JUDGMENT as follows: ___ by placing same to be deposited for mailing in the United States Mail, in a sealed envelope upon which first class postage was prepaid in Las Vegas, Nevada. X via electronic means by operation of the Court's electronic filing system, upon each party in the case who is registered as an electronic case filing user with the Clerk. ___ via facsimile. ___ via hand delivery. By: /s/ Norma Ramirez An Employee of Boyack Orme & Anthony Page 16 of 16 Case 2:16-cv-02013-JCM-NJK Document 33 Filed 04/18/17 Page 16 of 16 EXHIBIT A DEED OF TRUST Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 1 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 2 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 3 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 4 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 5 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 6 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 7 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 8 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 9 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 10 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 11 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 12 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 13 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 14 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 15 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 16 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 17 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 18 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 19 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 20 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 21 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 22 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 23 of 24 Case 2:16-cv-02013-JCM-NJK Document 33-1 Filed 04/18/17 Page 24 of 24 EXHIBIT B NOTICE OF DELINQUENT Case 2:16-cv-02013-JCM-NJK Document 33-2 Filed 04/18/17 Page 1 of 3 Case 2:16-cv-02013-JCM-NJK Document 33-2 Filed 04/18/17 Page 2 of 3 Case 2:16-cv-02013-JCM-NJK Document 33-2 Filed 04/18/17 Page 3 of 3 EXHIBIT C NOTICE OF DEFAULT Case 2:16-cv-02013-JCM-NJK Document 33-3 Filed 04/18/17 Page 1 of 3 Case 2:16-cv-02013-JCM-NJK Document 33-3 Filed 04/18/17 Page 2 of 3 Case 2:16-cv-02013-JCM-NJK Document 33-3 Filed 04/18/17 Page 3 of 3 EXHIBIT D NOTICE OF HOMEOWNERS ASSOCIATION SALE Case 2:16-cv-02013-JCM-NJK Document 33-4 Filed 04/18/17 Page 1 of 3 Case 2:16-cv-02013-JCM-NJK Document 33-4 Filed 04/18/17 Page 2 of 3 Case 2:16-cv-02013-JCM-NJK Document 33-4 Filed 04/18/17 Page 3 of 3 EXHIBIT E DEED IN FORECLOSURE Case 2:16-cv-02013-JCM-NJK Document 33-5 Filed 04/18/17 Page 1 of 3 Case 2:16-cv-02013-JCM-NJK Document 33-5 Filed 04/18/17 Page 2 of 3 Case 2:16-cv-02013-JCM-NJK Document 33-5 Filed 04/18/17 Page 3 of 3 EXHIBIT F QUIT CLAIM DEED Case 2:16-cv-02013-JCM-NJK Document 33-6 Filed 04/18/17 Page 1 of 8 Case 2:16-cv-02013-JCM-NJK Document 33-6 Filed 04/18/17 Page 2 of 8 Case 2:16-cv-02013-JCM-NJK Document 33-6 Filed 04/18/17 Page 3 of 8 Case 2:16-cv-02013-JCM-NJK Document 33-6 Filed 04/18/17 Page 4 of 8 Case 2:16-cv-02013-JCM-NJK Document 33-6 Filed 04/18/17 Page 5 of 8 Case 2:16-cv-02013-JCM-NJK Document 33-6 Filed 04/18/17 Page 6 of 8 Case 2:16-cv-02013-JCM-NJK Document 33-6 Filed 04/18/17 Page 7 of 8 Case 2:16-cv-02013-JCM-NJK Document 33-6 Filed 04/18/17 Page 8 of 8