Deutsche Bank National Trust Company v. SFR Investments Pool 1, LLC et al, No. 2:2017cv02638 - Document 73 (D. Nev. 2019)
Court Description: ORDER Granting in Part and Denying in Part 37 Motion for Reconsideration Denying as Moot 53 Motion for Summary Judgment, Denying as Moot 55 Motion for Summary Judgment, and Denying as Moot 56 Motion for Summary Judgment. Plaintiffs fifth, sixth, seventh, ninth, eleventh, and twelfth claims are DISMISSED with prejudice. Signed by Chief Judge Gloria M. Navarro on 3/31/2019. (Copies have been distributed pursuant to the NEF - ASB)
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Deutsche Bank National Trust Company v. SFR Investments Pool 1, LLC et al Doc. 73 1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 4 5 6 7 8 9 10 11 12 DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE FOR RESIDENTIAL ASSET SECURITIZATION TRUST 2006-A3CB MORTGAGE PASSTHROUGH CERTIFICATES, SERIES 2006-C, ) ) ) ) ) ) ) Plaintiff, ) vs. ) ) ) SFR INVESTMENTS POOL 1, LLC; ALIANTE MASTER ASSOCIATION; ) NEVADA ASSOCIATION SERVICES, INC., ) ) Defendants. ) ) Case No.: 2:17-cv-02638-GMN-GWF ORDER 13 Pending before the Court is the Motion for Reconsideration, (ECF No. 37), filed by 14 15 Defendant Aliante Master Association (“HOA”), to which Defendant SFR Investments Pool 1, 16 LLC (“SFR”) filed a Joinder, (ECF No. 47). Plaintiff Deutsche Bank National Trust Company 17 (“Plaintiff”) filed a Response, (ECF No. 44), and HOA filed a Reply, (ECF No. 46). For the 18 reasons discussed below, the Court GRANTS in part and DENIES in part HOA’s Motion for 19 Reconsideration. 20 I. BACKGROUND 21 This case arises from the non-judicial foreclosure on real property located at 6853 Jungle 22 Fowl Street, North Las Vegas, Nevada 89084 (the “Property”). (Compl. ¶ 1, ECF No. 1). In the 23 Complaint, Plaintiff asserts causes of action for: (1) quiet title with a requested remedy of 24 declaratory judgment; (2) declaratory relief under the Fifth Amendment and Fourteenth 25 Amendment; (3) quiet title under the Fifth Amendment and Fourteenth Amendment; (4) injunctive relief; (5) unjust enrichment against Borrower; (6) negligence; (7) negligence per se; Page 1 of 7 Dockets.Justia.com 1 (8) breach of contract; (9) misrepresentation; (10) breach of the covenant of good faith and fair 2 dealing; (11) wrongful and defective foreclosure; and (12) unjust enrichment against HOA and 3 NAS. (Id.). On November 13, 2017, HOA and SFR moved to dismiss each of Plaintiff’s claims as 4 5 untimely under applicable statutes of limitations for each cause of action. (HOA’s Mot. Dismiss 6 (“MTD”) 2:16–4:21, ECF No. 11); (SFR’s MTD 2:3–10, ECF No. 25). On August 8, 2018, the 7 Court denied HOA and SFR’s motions to dismiss, finding that Plaintiff’s claims effectively 8 centered on quieting title and therefore were timely asserted under a five-year limitations 9 period. (Order, ECF No. 36). HOA and SFR now request that the Court reconsider its prior 10 Order. (Mot. for Recons., ECF No. 37). 11 II. LEGAL STANDARD 12 “[A] motion for reconsideration should not be granted, absent highly unusual 13 circumstances.” Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003) (citation omitted). 14 Reconsideration is appropriate where: (1) the court is presented with newly discovered 15 evidence, (2) the court committed clear error or the initial decision was manifestly unjust, or 16 (3) if there is an intervening change in controlling law. School Dist. No. 1J, Multnomah Cnty v. 17 ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). 18 III. DISCUSSION 19 HOA and SFR seek reconsideration on the Court’s prior finding that a five-year 20 limitations period applies to this action. (HOA’s Mot. 2:20–24, ECF No. 37); (SFR’s Joinder 21 2:4–6:28, ECF No. 47). The Court previously reasoned that the gravamen of Plaintiff’s action 22 stemmed in quiet title, and therefore a uniform limitations period was appropriate. As the case 23 has developed, however, it has become clear that Plaintiff seeks to maintain independent 24 theories separate from its quiet title claim. Accordingly, the Court finds reconsideration on the 25 Page 2 of 7 1 applicable limitations periods for these individualized claims to be appropriate. The Court 2 addresses the statute of limitations for each cause of action in turn. A. Statutes of Limitations 1 3 i. Quiet Title 4 As stated in the Court’s prior Order, a five-year limitations period governs Plaintiff’s 5 6 first and third claims to quiet title. 2 (Compl. ¶¶ 66–98, ECF No. 1); see NRS 11.070; 7 DEUTSCHE BANK NATIONAL TRUST COMPANY, as Tr. for Saxon Asset Sec. Tr. 2007-3, 8 Mortg. Loan Asset Backed Certificates, Series 2007-3, Plaintiff, v. SFR INVESTMENTS POOL 9 1, LLC, et al., Defendants., No. 2:18–cv–00194–GMN–GWF, 2019 WL 1410887, at *4 (D. 10 Nev. Mar. 28, 2019). Because Plaintiff filed its Complaint less than five years after the 11 foreclosure sale, Plaintiff’s first and third claims for quiet title are timely. (See Compl.) (filed 12 October 11, 2017). ii. Negligence and Negligence Per Se 13 Plaintiff bases its sixth claim in negligence and its seventh claim in negligence per se. 14 15 (Compl. ¶¶ 117–133). In Nevada, negligence claims are generally subject to a two-year statute 16 of limitations. See NRS 11.190(4)(e). Where a negligence claim arises from alleged statutory 17 violations, courts apply the longer three-year period under NRS 11.190(3)(a), for an “action 18 19 1 20 21 22 23 24 25 To the extent Plaintiff seeks to lengthen the statutory limitations periods by arguing that it discovered its injury when the Nevada Supreme Court decided SFR Investments Pool 1, LLC v. U.S. Bank, 334 P.3d 408 (Nev. 2014), such argument fails. That decision simply clarified the law. K&P Homes v. Christiana Tr., 398 P.3d 292, 294 (Nev. 2017) (en banc). Indeed, NRS 116’s statutory language placed lenders on notice of their interests being in jeopardy. See Mitchell v. State, 149 P.3d 33, 38 (Nev. 2006) (holding that when a court clarifies the law, the clarification applies retroactively). Therefore, the date of the foreclosure sale is the operative date for purposes of calculating the statute of limitations. See Saticoy Bay LLC Series 2021 Gray Eagle Way v. JPMorgan Chase Bank, N.A., 388 P.3d 226, at 232 (Nev. 2017) (holding that the statute of limitations accrues on the date of the foreclosure sale). 2 The Court need not address statutory limitations periods for Plaintiff’s second claim for declaratory relief and fourth claim for injunctive relief because they are remedies associated with timely claims, not stand-alone causes of action. See Freeto v. Litton Loan Serv., LP, 3:09-cv-754-LRH-VPC, 2011 WL 112183, at *3 (D. Nev. Jan. 12, 2011) (dismissing claims for declaratory relief and permanent injunction because those remedies may only “be afforded to a party after he has sufficiently established and proven his claims”). Page 3 of 7 1 upon a liability created by statute.” See, e.g., Prof-2013-S3 Legal Title Tr., v. SFR Invs. Pool 1, 2 LLC, No. 2:17-cv-02079-JAD-PAL, 2018 WL 2465177, at *6 (D. Nev. May 31, 2018). Under 3 either a two or three-year limitations period, Plaintiff’s negligence and negligence per se claims 4 are untimely. 5 iii. Breach of Contract and Breach of the Implied Covenant of Good Faith and Fair Dealing 6 7 Plaintiff’s eighth claim asserts breach of contract, and Plaintiff’s tenth claim asserts 8 breach of the implied covenant of good faith and fair dealing. These two claims focus on 9 violations of the HOA’s CC&Rs that controlled the Property. (Compl. ¶¶ 134–138, 148–153). 10 NRS 11.190(1)(b) governs these claims because they focus “upon a contract, obligation or 11 liability founded upon an instrument in writing.” Prof-2013-S3 Legal Title Tr., by U.S. Bank 12 Nat'l Ass’n v. SFR Investments Pool 1, LLC, No. 2:17-cv-02079-JAD-PAL, 2018 WL 2465177, 13 at *7 (D. Nev. May 31, 2018). Consequently, NRS 11.190(1)(b)’s six-year limitations period 14 applies to these claims. Plaintiff’s eighth and tenth claims are thus timely because they arise 15 from the HOA’s foreclosure sale that occurred on March 8, 2013. Id. 16 17 iv. Misrepresentation Plaintiff does not specify whether it bases its ninth claim for “misrepresentation” in 18 fraud or negligence. (Compl. ¶¶ 139, 147). The Court therefore looks to “[t]he nature of the 19 claim, not its label” to determine what statute of limitations applies. Perry v. Terrible Herbst, 20 Inc., 383 P.3d 257, 260 (Nev. 2016). 21 Plaintiff alleges misrepresentation on the ground that HOA and NAS “failed to exercise 22 reasonable care or competence in communicating the information within the provisions of the 23 CC&Rs or it had an insufficient basis for making [such communication].” (Id. ¶¶ 139–147). 24 This “reasonable care” language satisfies one of the required elements for a claim of negligent 25 misrepresentation under Nevada law. Barmettler v. Reno Air, Inc., 114 Nev. 441, 449 (1998). Page 4 of 7 1 The Court accordingly construes Plaintiff’s misrepresentation claim as one in negligence, 2 subject to, at most, the three-year limitations period in NRS 11.190(3)(d). Plaintiff fourth claim 3 is then time-barred and dismissed. 4 v. Unjust Enrichment 5 Plaintiff’s fifth and twelfth claims are based on unjust enrichment due to benefits 6 allegedly conferred by Plaintiff after the Property’s foreclosure sale. (Compl. ¶¶ 108–116, 165– 7 170). Specifically, Plaintiff’s fifth claim for unjust enrichment alleges that, after the 8 foreclosure sale, Plaintiff paid “taxes, insurance or homeowner’s association assessments,” of 9 which Borrower retained the benefit without compensating Plaintiff. (Id. ¶¶ 108–116). 10 Similarly, Plaintiff’s twelfth claim alleges that, “should Plaintiff’s Complaint be unsuccessful 11 in quieting title against Defendants, the HOA and HOA Trustee retained proceeds from the 12 HOA Sale which belonged to Plaintiff.” (Id. ¶¶ 165–170). 13 The statute of limitations for an unjust enrichment claim under Nevada law is four years. 14 Nev. Rev. Stat. 11.190(2)(c). Here, Plaintiff provides no specific dates that show when it made 15 payments or incurred charges that create its unjust enrichment claims; nor does Plaintiff state 16 when the named defendants accepted or retained these benefits. Instead, Plaintiff states that 17 these payments or charges arose “from the unlawful HOA sale” on March 8, 2013. (Id. ¶¶ 110, 18 166); (Foreclosure Deed, Ex. 7 to Compl., ECF No. 1). Because the only anchor date of March 19 8, 2013, is outside the four-year statute of limitations period, Plaintiff’s unjust enrichment 20 claims are dismissed as untimely. 21 22 vi. Wrongful Foreclosure Plaintiff’s eleventh claim asserts “wrongful/defective foreclosure” against HOA and 23 NAS. A wrongful foreclosure claim “challenges the authority behind the foreclosure, not the 24 foreclosure act itself.” McKnight Family, L.L.P. v. Adept Mgmt., 310 P.3d 555, 559 (Nev. 25 2013). Such a claim may be based on statutory violations or it may be a tort. Bank of New York Page 5 of 7 1 v. Foothills at MacDonald Ranch Master Ass’n, 329 F. Supp. 3d 1221, 1234 (D. Nev. 2018). 2 When premised upon statutory violations, a three-year limitations period applies. See NRS 3 11.190(3)(a) (“An action upon a liability created by statute, other than a penalty or forfeiture” 4 may only be commenced “[w]ithin 3 years.”); see Bank of New York Mellon v. Hillcrest at 5 Summit Hills Homeowners Ass’n, No. 2:16-cv-02295-GMN-PAL, 2019 WL 415324, at *3 (D. 6 Nev. Jan. 31, 2019). Conversely, wrongful foreclosure actions sounding in tort are subject to 7 Nevada’s four-year residual limitations period. NRS 11.220; see Foothills, 329 F. Supp. 3d at 8 1234 (“[T]he four-year catchall limitation is appropriate for a tortious wrongful foreclosure 9 claim.”); Bank of New York v. S. Highlands Cmty. Ass’n, 329 F. Supp. 3d 1208, 1219 (D. Nev. 10 11 2018) (same). Here, BANA’s “wrongful/defective foreclosure” claim arises from both statutory 12 violations of NRS Chapter 116 and as well as theories independent of that statutory scheme. 13 (Compl. ¶¶ 154–164). Therefore, at most, Plaintiff had to bring its claims within four years of 14 the Property’s March 8, 2013 foreclosure sale. Because Plaintiff filed its Complaint more than 15 four years later, Plaintiff’s eleventh claim is untimely and dismissed with prejudice. Moreover, 16 the Court rejects Plaintiff’s argument that its wrongful foreclosure claim warrants a six-year 17 limitations period based on the claim’s references to violations of the CC&Rs. Because the 18 authority behind the sale here was NRS 116, not the CC&Rs, the CC&Rs do not guide the 19 statute of limitations for this claim. McKnight Family, L.L.P. v. Adept Mgmt., 310 P.3d 555, 20 559 (Nev. 2013); Bank of New York Mellon v. Tierra De Las Palmas Owners Ass’n, No. 2:17- 21 cv-02112-JAD-CWH, 2018 WL 2292525, at *3 (D. Nev. May 18, 2018). 22 B. Pending Dispositive Motions 23 After HOA filed its Motion for Reconsideration, the parties filed separate Motions for 24 Summary Judgment, (ECF Nos. 53, 55, 56). In light of the Court’s reconsideration now finding 25 several of Plaintiff’s claims untimely, the Court denies the pending Motions for Summary Page 6 of 7 1 Judgment as moot with leave to re-file. Leave to refile permits the parties to tailor their 2 arguments to Plaintiff’s remaining claims without pages unnecessarily spent on now-barred 3 causes of action. Additionally, the Court recognizes the recent fluctuations in Nevada law for 4 quiet title actions based on a homeowners’ association foreclosure. Thus, in re-filing, the 5 parties are not confined to prior arguments or asserted authorities. 6 IV. 7 CONCLUSION IT IS HEREBY ORDERED that HOA’s Motion for Reconsideration, (ECF No. 37), is 8 GRANTED in part and DENIED in part pursuant to the foregoing. Plaintiff’s fifth, sixth, 9 seventh, ninth, eleventh, and twelfth claims are DISMISSED with prejudice. 10 11 12 IT IS FURTHER ORDERED that the Motions for Summary Judgment, (ECF Nos. 53, 55, 56), filed by Plaintiff, HOA, and SFR are DENIED as moot, without prejudice. 31 DATED this _____ day of March, 2019. 13 14 15 16 ___________________________________ Gloria M. Navarro, Chief Judge United States District Judge 17 18 19 20 21 22 23 24 25 Page 7 of 7
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