CitiMortgage, Inc. v. Corte Madera Homeowners Association

D. Nevada

CitiMortgage, Inc. v. Corte Madera Homeowners Association

DecidedMarch 4, 2022

Docket2:16-cv-00398

StatusUnknown

This text of CitiMortgage, Inc. v. Corte Madera Homeowners Association (CitiMortgage, Inc. v. Corte Madera Homeowners Association) is published on Counsel Stack Legal Research, covering District Court, D. Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

CitiMortgage, Inc. v. Corte Madera Homeowners Association, (D. Nev. 2022).

Pincite

Opinion

1 MELANIE D. MORGAN, ESQ. Nevada Bar No. 8215 2 SCOTT R. LACHMAN, ESQ. Nevada Bar No. 12016 3 AKERMAN LLP 1635 Village Center Circle, Suite 200 4 Las Vegas, NV 89134 Telephone: (702) 634-5000 5 Facsimile: (702) 380-8572 Email: melanie.morgan@akerman.com 6 Email: scott.lachman@akerman.com 7 Attorneys for CitiMortgage, Inc. 8 UNITED STATES DISTRICT COURT 9 DISTRICT OF NEVADA 10 11 CITIMORTGAGE, INC., Case No.: 2:16-cv-00398-JCM-GWF 12 Plaintiff, [PROPOSED] STIPULATION AND ORDER 13 v. REGARDING DEED OF TRUST 14 CORTE MADERA HOMEOWNERS APN: 139-20-716-057 15 ASSOCIATION; SUSAN PATCHEN; THE EAGLE AND THE CROSS LLC; NEVADA 16 ASSOCIATION SERVICES, INC., 17 Defendants. 18 19 SUSAN PATCHEN; and THE EAGLE AND THE CROSS LLC, 20 Counterclaimants, 21 v. 22 CITIMORTGAGE, INC.; and DOES 23 1 through 10, inclusive; ROE Corporations 1 through 10, inclusive, 24 Counterdefendants. 25 26 27 1 On January 13, 2022, the Ninth Circuit issued a Mandate, which returned jurisdiction to this 2 Court for proceedings consistent with the Ninth Circuit Court of Appeals' November 14, 2021, 3 Memorandum. The Memorandum reversed this Court's July 27, 2020, Order that had granted 4 summary judgment in favor of Susan Patchen (Patchen) and the Eagle and the Cross LLC (Eagle) 5 (collectively Defendants). The Ninth Circuit concluded that CitiMortgage, Inc. (Citi) had standing to 6 challenge a violation of the automatic bankruptcy stay and that there was such a violation of the stay. 7 The Court, having considered the Memorandum, the parties' stipulation, and good cause 8 appearing, makes the following findings of fact, conclusions of law, and order. 9 FINDINGS OF FACT 10 1. This case involves the ownership to, and lien rights against, that certain real property 11 located at 2517 Danborough Court, Unit 106, Las Vegas, NV 89106 (the Property). 12 2. On or about November 26, 2007, Kathy Horton (Horton) executed a deed of trust 13 dated November 26, 2007 (the Deed of Trust) that listed Home Loan Center Inc. as the lender, and 14 Mortgage Electronic Registration Systems Inc. (MERS), as the beneficiary. The Deed of Trust was 15 recorded in the property records of Clark County, Nevada. 16 3. In a written assignment that was recorded on December 24, 2009, MERS assigned the 17 Deed of Trust to Bank of America, N.A. (BANA). BANA assigned the Deed of Trust to Citi in a 18 written assignment that was recorded on June 26, 2013. 19 4. On July 2, 2013, Nevada Association Services, Inc. (NAS) recorded a notice of 20 delinquent assessment lien as agent of the HOA, stating that Horton had breached the CC&Rs by 21 failing to pay her regular assessments and that the HOA claimed a lien on the Property. 22 5. The HOA, through NAS, then recorded a notice of default and election to sell on 23 October 11, 2013. 24 6. Both notices were recorded while the automatic stay was in effect from Horton's 25 bankruptcy case, which was filed on February 29, 2012 in the U.S. Bankruptcy Court for the District 26 of Nevada. In re Horton, No. 12:12197-led. 27 /// 1 7. In her chapter 7 petition, Horton listed the Property as an asset. She stated in her 2 petition that she intended to surrender the Property to the bankruptcy estate and did not claim it as 3 exempt. 4 8. The Property remained property of the estate until October 17, 2013, when the trustee's 5 report stated that he abandoned the Property, and the bankruptcy court entered a final decree 6 discharging the trustee and closing the case. In re Horton, No. 12:12197-led, ECF No. 26, 27. No 7 party ever sought or received relief from the automatic stay. 8 9. NAS continued with the foreclosure, recording a notice of sale in April 2014. 9 10. At the May 16, 2014, foreclosure, NAS sold the property to Patchen. 10 11. In March 2015, Patchen quitclaimed the property for zero dollars to Eagle, a limited 11 liability company she owns and controls. 12 CONCLUSIONS OF LAW 13 1. In accordance with the Memorandum, this Court adopts the Ninth Circuit’s conclusion 14 that the HOA's foreclosure sale was void because it was barred by the automatic stay resulting from 15 Horton's bankruptcy. 16 2. Last year, the Ninth Circuit decided that the holder of a deed of trust may bring an 17 action under Nevada's quiet title statutes (NRS 40.010) to obtain an order declaring a homeowners 18 association foreclosure sale void on the basis that the sale violated the automatic bankruptcy stay. 19 Bank of New York Mellon v. Enchantment at Sunset Bay Condo. Ass'n, 2 F.4th 1229, 1232 (9th Cir. 20 2021). 21 3. On the basis of Enchantment, the Ninth Circuit held in the Memorandum Opinion that 22 Citi had standing to bring its quiet title claim based on the alleged bankruptcy stay violation. 23 4. The Ninth Circuit also decided that the Property was property of the bankruptcy estate 24 because Horton did not claim the Property as exempt in her bankruptcy petition. 25 5. Accordingly, the Ninth Circuit determined that "[t]he recording of the notice of 26 delinquent assessment lien and notice of default violated the automatic stay because the automatic stay 27 prohibits 'any act to create, perfect, or enforce any lien against property of the estate." Mem. Op. at 3 1 5. The Ninth Circuit cited Nevada law for the proposition that, "the recording of a notice 2 of default pursuant to Nevada law violates the automatic bankruptcy stay, rendering the foreclosure 3 sale void." Mem. Op. at 3 (citing Premier One Holdings, Inc. v. Bank of New York Mellon, 401 P.3d 4 1145, 2017 WL 4158138 at * 1 (Nev. Sept. 19, 2017) (unpublished)). 5 6. Under the mandate rule, "when a case has been decided by an appellate court and 6 remanded, the court to which it is remanded must proceed in accordance with the mandate and such 7 law of the case as was established by the appellate court." U.S. v. Luong, 627 F.3d 1306 (9th 8 Cir.2010); see also U.S. v. Miller, 822 F.2d 828, 832 (9th Cir. 1987) ("The rule is that the mandate of 9 an appeals court precludes the district court on remand from considering matters which were either 10 expressly or implicitly disposed of upon appeal."). 11 7. Because the Ninth Circuit held that the HOA's recording of the notice of delinquent 12 assessment lien and notice of default violated the automatic bankruptcy stay, this Court rules in 13 accordance with the law of the case and holds that the HOA's foreclosure sale was void because it 14 violated the automatic bankruptcy stay. 15 ORDER 16 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the property located at 17 2517 Danborough Court, Unit 106, Las Vegas, NV 89106, APN 139-20-716-057 remains encumbered 18 by the Deed of Trust recorded in the Clark County Recorder's Office as Instrument Number 2006013- 19 0002764. 20 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the Foreclosure Deed 21 recorded in the Clark County Recorder's Office as Instrument Number 20140519-0003166 is void and 22 did not convey any valid title or interest to Susan Patchen. 23 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that judgment is entered in 24 Citi's favor on all claims Citi asserted against the Defendants and all claims the Defendants asserted 25 against Citi. 26 /// 27 /// CitiMortgage, Inc. v. Corte Madera Homeowners Associatic 2:16-cv-00398-JCM-GW 1 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that this Order may | 2 || recorded in the Clark County Recorder's Office.

Free access — add to your briefcase to read the full text and ask questions with AI

1 MELANIE D. MORGAN, ESQ. Nevada Bar No. 8215 2 SCOTT R. LACHMAN, ESQ. Nevada Bar No. 12016 3 AKERMAN LLP 1635 Village Center Circle, Suite 200 4 Las Vegas, NV 89134 Telephone: (702) 634-5000 5 Facsimile: (702) 380-8572 Email: melanie.morgan@akerman.com 6 Email: scott.lachman@akerman.com 7 Attorneys for CitiMortgage, Inc. 8 UNITED STATES DISTRICT COURT 9 DISTRICT OF NEVADA 10 11 CITIMORTGAGE, INC., Case No.: 2:16-cv-00398-JCM-GWF 12 Plaintiff, [PROPOSED] STIPULATION AND ORDER 13 v. REGARDING DEED OF TRUST 14 CORTE MADERA HOMEOWNERS APN: 139-20-716-057 15 ASSOCIATION; SUSAN PATCHEN; THE EAGLE AND THE CROSS LLC; NEVADA 16 ASSOCIATION SERVICES, INC., 17 Defendants. 18 19 SUSAN PATCHEN; and THE EAGLE AND THE CROSS LLC, 20 Counterclaimants, 21 v. 22 CITIMORTGAGE, INC.; and DOES 23 1 through 10, inclusive; ROE Corporations 1 through 10, inclusive, 24 Counterdefendants. 25 26 27 1 On January 13, 2022, the Ninth Circuit issued a Mandate, which returned jurisdiction to this 2 Court for proceedings consistent with the Ninth Circuit Court of Appeals' November 14, 2021, 3 Memorandum. The Memorandum reversed this Court's July 27, 2020, Order that had granted 4 summary judgment in favor of Susan Patchen (Patchen) and the Eagle and the Cross LLC (Eagle) 5 (collectively Defendants). The Ninth Circuit concluded that CitiMortgage, Inc. (Citi) had standing to 6 challenge a violation of the automatic bankruptcy stay and that there was such a violation of the stay. 7 The Court, having considered the Memorandum, the parties' stipulation, and good cause 8 appearing, makes the following findings of fact, conclusions of law, and order. 9 FINDINGS OF FACT 10 1. This case involves the ownership to, and lien rights against, that certain real property 11 located at 2517 Danborough Court, Unit 106, Las Vegas, NV 89106 (the Property). 12 2. On or about November 26, 2007, Kathy Horton (Horton) executed a deed of trust 13 dated November 26, 2007 (the Deed of Trust) that listed Home Loan Center Inc. as the lender, and 14 Mortgage Electronic Registration Systems Inc. (MERS), as the beneficiary. The Deed of Trust was 15 recorded in the property records of Clark County, Nevada. 16 3. In a written assignment that was recorded on December 24, 2009, MERS assigned the 17 Deed of Trust to Bank of America, N.A. (BANA). BANA assigned the Deed of Trust to Citi in a 18 written assignment that was recorded on June 26, 2013. 19 4. On July 2, 2013, Nevada Association Services, Inc. (NAS) recorded a notice of 20 delinquent assessment lien as agent of the HOA, stating that Horton had breached the CC&Rs by 21 failing to pay her regular assessments and that the HOA claimed a lien on the Property. 22 5. The HOA, through NAS, then recorded a notice of default and election to sell on 23 October 11, 2013. 24 6. Both notices were recorded while the automatic stay was in effect from Horton's 25 bankruptcy case, which was filed on February 29, 2012 in the U.S. Bankruptcy Court for the District 26 of Nevada. In re Horton, No. 12:12197-led. 27 /// 1 7. In her chapter 7 petition, Horton listed the Property as an asset. She stated in her 2 petition that she intended to surrender the Property to the bankruptcy estate and did not claim it as 3 exempt. 4 8. The Property remained property of the estate until October 17, 2013, when the trustee's 5 report stated that he abandoned the Property, and the bankruptcy court entered a final decree 6 discharging the trustee and closing the case. In re Horton, No. 12:12197-led, ECF No. 26, 27. No 7 party ever sought or received relief from the automatic stay. 8 9. NAS continued with the foreclosure, recording a notice of sale in April 2014. 9 10. At the May 16, 2014, foreclosure, NAS sold the property to Patchen. 10 11. In March 2015, Patchen quitclaimed the property for zero dollars to Eagle, a limited 11 liability company she owns and controls. 12 CONCLUSIONS OF LAW 13 1. In accordance with the Memorandum, this Court adopts the Ninth Circuit’s conclusion 14 that the HOA's foreclosure sale was void because it was barred by the automatic stay resulting from 15 Horton's bankruptcy. 16 2. Last year, the Ninth Circuit decided that the holder of a deed of trust may bring an 17 action under Nevada's quiet title statutes (NRS 40.010) to obtain an order declaring a homeowners 18 association foreclosure sale void on the basis that the sale violated the automatic bankruptcy stay. 19 Bank of New York Mellon v. Enchantment at Sunset Bay Condo. Ass'n, 2 F.4th 1229, 1232 (9th Cir. 20 2021). 21 3. On the basis of Enchantment, the Ninth Circuit held in the Memorandum Opinion that 22 Citi had standing to bring its quiet title claim based on the alleged bankruptcy stay violation. 23 4. The Ninth Circuit also decided that the Property was property of the bankruptcy estate 24 because Horton did not claim the Property as exempt in her bankruptcy petition. 25 5. Accordingly, the Ninth Circuit determined that "[t]he recording of the notice of 26 delinquent assessment lien and notice of default violated the automatic stay because the automatic stay 27 prohibits 'any act to create, perfect, or enforce any lien against property of the estate." Mem. Op. at 3 1 5. The Ninth Circuit cited Nevada law for the proposition that, "the recording of a notice 2 of default pursuant to Nevada law violates the automatic bankruptcy stay, rendering the foreclosure 3 sale void." Mem. Op. at 3 (citing Premier One Holdings, Inc. v. Bank of New York Mellon, 401 P.3d 4 1145, 2017 WL 4158138 at * 1 (Nev. Sept. 19, 2017) (unpublished)). 5 6. Under the mandate rule, "when a case has been decided by an appellate court and 6 remanded, the court to which it is remanded must proceed in accordance with the mandate and such 7 law of the case as was established by the appellate court." U.S. v. Luong, 627 F.3d 1306 (9th 8 Cir.2010); see also U.S. v. Miller, 822 F.2d 828, 832 (9th Cir. 1987) ("The rule is that the mandate of 9 an appeals court precludes the district court on remand from considering matters which were either 10 expressly or implicitly disposed of upon appeal."). 11 7. Because the Ninth Circuit held that the HOA's recording of the notice of delinquent 12 assessment lien and notice of default violated the automatic bankruptcy stay, this Court rules in 13 accordance with the law of the case and holds that the HOA's foreclosure sale was void because it 14 violated the automatic bankruptcy stay. 15 ORDER 16 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the property located at 17 2517 Danborough Court, Unit 106, Las Vegas, NV 89106, APN 139-20-716-057 remains encumbered 18 by the Deed of Trust recorded in the Clark County Recorder's Office as Instrument Number 2006013- 19 0002764. 20 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the Foreclosure Deed 21 recorded in the Clark County Recorder's Office as Instrument Number 20140519-0003166 is void and 22 did not convey any valid title or interest to Susan Patchen. 23 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that judgment is entered in 24 Citi's favor on all claims Citi asserted against the Defendants and all claims the Defendants asserted 25 against Citi. 26 /// 27 /// CitiMortgage, Inc. v. Corte Madera Homeowners Associatic 2:16-cv-00398-JCM-GW 1 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that this Order may | 2 || recorded in the Clark County Recorder's Office. 3 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the motion for pos 4 || remand status check or alternatively submission of a post-remand order declaring the deed of tru 5 || survived the HOA sale [ECF No. 69] filed by Citi on January 25, 2022 is hereby vacated as moot. 6 IS FURTHER ORDERED, ADJUDGED, AND DECREED that all claims are now resolve 7 || and the clerk of court shall close this matter. 8 9 © Atal La 10 UNITE}? STATES DISTRICT JUDGE DATED: March 4, 2022 12

13 Submitted by: 14 4 /s/ Scott R. Lachman 15 || MELANIE D. MORGAN, ESQ. Nevada Bar No. 8215 16 || SCOTT R. LACHMAN, ESQ. 2 Nevada Bar No. 12016 AKERMAN LLP 18 || 1635 Village Center Circle, Suite 200 Las Vegas, NV 89134 19 50 Attorneys for CitiMortgage, Inc.

21 09 /s/ Garrett R. Chase GARRETT R. CHASE, ESQ. 23 || Nevada Bar No. 14498 SHUMWAY VAN 24 || 8985 S. Eastern Avenue, Suite 100 Las Vegas, NV 89123 25 26 Attorneys for Susan Patchen and Eagle and the Cross LLC 27 28

Cite This Page — Counsel Stack

Bluebook (online)

CitiMortgage, Inc. v. Corte Madera Homeowners Association, Counsel Stack Legal Research, https://law.counselstack.com/opinion/citimortgage-inc-v-corte-madera-homeowners-association-nvd-2022.

Opinion

Related

Cite This Page — Counsel Stack