Wilmington Trust, National Association v. Saticoy Bay LLC

• Court: District Court, D. Nevada
• Decided: September 26, 2019
• Docket: 2:17-cv-00460
• Status: Unknown

Opinion

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 4 Wilmington Trust, N.A., as Trustee of ARLP Case No. 2:17-cv-00460-JAD-NJK Securitization Trust, Series 2014-2, 5 Plaintiff 6 v. 7 Saticoy Bay LLC Series 206 Valerian; Order Granting in Part and Cinnamon Ridge Community Association; Denying in Part Motions for Summary Judgment and to Dismiss 8 and Nevada Association Services, Inc., 9 Defendants [ECF Nos.35, 39, 49, 50, 52] 10 ALL OTHER PARTIES AND CLAIMS 11 12 13 Wilmington Trust, N. A.brings this action to challenge the effect of the 2014non- 14 judicial foreclosure sale of a home on which it claims a deed of trust.1 Wilmingtonsues the 15 Cinnamon Ridge CommunityAssociation(the HOA), which conducted the foreclosure sale, and 16 foreclosure-sale purchaser Saticoy Bay, LLC Series 206 Valerian,primarily seeking a 17 declaration that the sale was invalid orthat Saticoy Baypurchased the property subject to 18 Wilmington’s security interest.2 Saticoy Bayand the HOA move to dismiss Wilmington’s 19 claims,and all parties cross-move for summary judgment on various claims.3 20 21 22 1 ECF No. 1. 2 Wilmington also sued the HOA’s agent, Nevada Association Services, Inc. (NAS), but NAS 23 failed to respond and the Clerk of Court entered default against it. SeeECF No. 48. 3 I find these motions suitable for disposition without oral argument. L.R. 78-1. 1 Because Wilmingtonhas demonstrated that the original homeowner paid all outstanding 2 assessments, thereby satisfying the full superpriority piece of the HOA’s lien before the 3 foreclosure sale, Ifind that the foreclosure sale did not involve a superpriority component that 4 could have extinguished the deed of trust. So, I grant partial summary judgment in 5 Wilmington’s favor onthe quiet-title claims and dismiss its remaining quiet-title theories as

6 moot. Igrant the HOA’s motion to dismiss Wilmington’s claims for negligence, negligence per 7 se, and misrepresentation, but I deny the motions in all other respects. This case thus proceeds 8 on Wilmington’s unjust-enrichment claim against Saticoy Bay and the HOA, and on 9 Wilmington’s claims against the HOA for breach of contract and breach of the implied covenant 10 of good faith and fair dealing, and I order the parties to a settlement conference with the 11 magistrate judge. 12 Background 13 Daniel A. Acosta purchased the home at 206 Valerian Street in Henderson, Nevada,in 14 2007with a $435,600loan from EquiFirst Corporation, secured by a deed of trust.4 After two

15 assignments,Wilmingtonnow holds that deed of trust.5 The homeis located in the Cinnamon 16 Ridgeplanned-unit development and subject to thegoverning documents for its homeowners’ 17 association.6 18 The Nevada Legislature gave homeowners’ associations asuperprioritylien against 19 residential property for certain delinquent assessments and established in Chapter 116 of the 20 21 22 4 ECFNo. 31-2 (deed of trust). 23 5 ECF No. 31-3; 31-4. 6 ECF No. 31-2 at 21 (PUD rider). 1 Nevada Revised Statutes a non-judicial foreclosure procedure for them to enforce that lien.7 2 When the assessments on this homebecame delinquent, the HOA commenced non-judicial 3 foreclosure proceedings on it under Chapter 116 by recording a notice of delinquent assessment 4 lien on March 19, 2012.8 The notice stated that the “TOTAL delinquent assessments through” 5 that date were “the amount of $881.69,” which “include[d] attorney’s fees (if any), late fees,

6 collection fees[,] and interest in the amount of $673.98.”9 The HOA followed that up with a 7 notice of default and election to sell under homeowners association lien, recorded on May 17, 8 2012.10 9 The HOA ultimately foreclosedon the home more than two years later on August 1, 10 2014.11 But more than a year before that, on April 30, 2013, the homeowner paid the HOA 11 $536.14. The HOA applied that payment to the outstanding monthly assessment balance. The 12 HOA’s FRCP 30(b)(6) representative, Sharon Taylor Bergeron, testified at her deposition that 13 Acosta’s payment “cured all of the assessments before that May 17, 2012, recorded date.”12 14 As the Nevada Supreme Court held inSFR Investments Pool 1 v. U.S. Bank(“SFR I”)in

15 2014, because NRS 116.3116(2) gives an HOA “a true superpriority lien, proper foreclosure of” 16 that lien under the non-judicial foreclosure process created by NRS Chapters 107 and 116 “will 17 18 19 7 Nev. Rev. Stat. § 116.3116; SFR Investments Pool 1 v. U.S. Bank(“SFR I”), 334 P.3d 408, 409 (Nev. 2014). 20 8 ECF Nos. 31-5 (notice of delinquent assessment lien). 21 9 Id. at 2. 22 10 ECF No. 31-6 at 2. 11 ECF No. 31-8 at 2 (foreclosure deed, recorded on August 5, 2014). I take judicial notice of the 23 recorded documents. 12 ECF No. 49-1 at 19:4–11. 1 extinguish a first deed of trust.”13 But the court also explained that an HOA’s lien has two 2 parts—superpriorityand subpriority—and in cases since SFR I,the Nevada Supreme Court has 3 heldthat satisfaction of the superpriority portion of thelien before the foreclosure sale will save 4 the first deed of trust from extinguishment. 5 Wilmington filed this suit against Saticoy Bay in February 201714 but amended to add

6 claims against the HOA in January of this year. In its amended complaint, Wilmingtonpleads 7 elevenclaims: five for quiet title,15 and individual claims for unjust enrichment, negligence, 8 negligence per se, breach of contract, breach of the implied covenant of good faith and fair 9 dealing, and misrepresentation. Saticoy Bay counterclaims for quiet title.16 The parties’ quiet- 10 title claims are the type recognized by the Nevada Supreme Court inShadow Wood Homeowners 11 Association, Inc. v. New York Community Bancorp—an action “seek[ing] to quiet title by 12 invoking the court’s inherent equitable jurisdiction to settle title disputes.”17 Wilmington’s 13 quiet-title claims (and defenses to Saticoy’s counterclaims) are grounded in a handful of theories 14 including that thestatutory schemeviolated due process,the superpriority portion of the lien had

15 been satisfied, and the sale was not commercially reasonableor was otherwisewrongfully 16 conducted.18 17 18 13 SFR I, 334 P.3d at 419. 19 14 ECF No. 1. 15 ECF No. 31 (amended complaint). Although these first, second, third, fourth, and sixth causes 20 of action have various titles, including declaratory relief, injunctive relief, and wrongful foreclosure, all seekbasicallythe same relief: a determination that the foreclosure sale was 21 defective and should be set aside, or that it did not extinguish the deed of trust. 22 16 ECF No. 34 (Saticoy Bay’s counterclaim). 17 Shadow Wood Homeowners Ass’n, Inc. v. New York Cmty.Bancorp,366 P.3d 1105, 1110– 23 1111 (Nev. 2016). 18 See generally ECF Nos. 31, 58. 1 Discovery has closed,19 and Wilmington moves for summary judgment on the quiet-title 2 claims,arguingthat the homeowner’s payment satisfied the superpriority portion of the HOA’s 3 lien, so the foreclosure sale could not have extinguished its deed of trust.20 The HOA moves to 4 dismiss and for summary judgment, contendingthat Wilmington’s claims are barred by 5 applicable statutes of limitations or the doctrine of laches, and that its quiet-title theories fail for

6 a handful of other reasons.21 Saticoy Bay also moves to dismiss and for summary judgment, 7 offering thesame slate of boilerplate arguments that it has made in the scores of nearly identical 8 cases like this one pending in this district. Iconsider each party’s positions in turn. 9 Discussion 10 A. Standards for crossmotions for summary judgment 11 The principal purpose of the summary-judgment procedure is to isolate and dispose of 12 factually unsupported claims or defenses.22 The moving party bears the initial responsibility of 13 presenting the basis for its motion and identifying theportions of the record or affidavits that 14 demonstrate the absence of a genuine issue of material fact.23 If the moving party satisfies its

15 burden with a properly supported motion, the burden then shifts to the opposing party to present 16 specific facts that show a genuine issue for trial.24 17 Who bears the burden of proof on the factual issue in question is critical. When the party 18 moving for summary judgment would bear the burden of proof at trial (typically the plaintiff), “it 19 19 ECF No. 44. 20 20 ECF No. 49. 21 21 ECF Nos. 39, 50. 22 22 Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986). 23 Celotex, 477 U.S. at 323; Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) (en banc). 23 24 Fed. R. Civ. P. 56(e); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248(1986); Auvil v. CBS 60 Minutes,67 F.3d 816, 819 (9th Cir. 1995). 1 must come forward with evidence [that] would entitle it to a directed verdict if the evidence went 2 uncontroverted at trial.”25 Once the moving party establishes the absence of a genuine issue of 3 fact on each issue material to its case,“the burden then moves to the opposing party, who must 4 present significant probative evidence tending to support its claim or defense.”26 When instead 5 the opposing party would have the burden of proof on a dispositive issue at trial, the moving

6 partydoesn’t have to produce evidence to negatethe opponent’s claim; it merely has to point out 7 the evidence that shows an absence of a genuine material factual issue.27 The movant need only 8 defeat one element of the claim to garner summary judgment on it because “acomplete failure of 9 proof concerning an essential element of the nonmoving party’s case necessarily renders all other 10 facts immaterial.”28 11 B. Wilmington is entitled to partial summary judgment because the homeowner’s tender of the superpriority amount cured the defaultand satisfied the lien,saving 12 the deed of trustfrom extinguishment. 13 Wilmingtonargues that homeownerAcosta’s April 30, 2013, $536.14payment cured all 14 unpaid assessments and satisfied the entire superpriority portion of the HOA’s lien. So, when 15 the HOA ultimately foreclosed, the only thing it could have foreclosed on was a subpriority lien, 16 which had no effect on the deed of trust. Saticoy Bay argues that only the lendercan satisfy the 17 superpriority piece of an HOA lien with a partial payment.29 It reasons that the super/sub- 18 19 25 C.A.R. Transp. Brokerage Co. v. Darden Restaurants, Inc., 213 F.3d 474, 480 (9th Cir. 2000) (quoting Houghton v. South, 965 F.2d 1532, 1536 (9th Cir.1992) (citation and quotations 20 omitted)). 26 Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d 1551, 1558 (9th Cir.1991)(citation 21 omitted). 22 27 See, e.g., Lujan v. National Wildlife Fed’n, 497 U.S. 871, 885 (1990); Celotex, 477 U.S. at 323–24. 23 28 Celotex, 477 U.S. at 322. 29 ECF No. 55 at 5. 1 priority dichotomy is “a specially devised mechanism designed to strike an equitable balance 2 between the need to enforce collection of unpaid assessments and the obvious necessity for 3 protecting the priority of the security interest of lenders.”30 It further suggests that “to allow” 4 lenders “to benefit from homeowner payments, while” sitting on their hands “would fly in the 5 face of” the goal of an “equitable sharing of the costs of preserving the value of the mortgagee’s

6 security.”31 7 1. A homeowner’s tender of the full superpriority amount, when applied to the charges that comprise the superpriority amount, discharges that portion 8 of the lien and saves the deed of trust. 9 Saticoy Bay’s fairness concern about making the lender feel the pain of payment before 10 earningthe reward of deed-of-trust preservation ignores how these HOA liens work. “NRS 11 116.3116(1) gives an HOA a lien on its homeowners’ residences” for “any assessment levied 12 against that unit or any fines imposed against the unit’s owner . . . .”32 NRS 116.3116(2) 13 “elevates the priority of th[at] HOA lien over other liens” by making these liens “prior to all 14 other liens and encumbrances” except for first deeds of trust recorded before the assessments 15 became delinquent.33 “If subsection 2 ended there, a first deed oftrust would have complete 16 priority over an HOA lien. But it goes on to carve out a partial exception” to that exclusionby 17 making the lien “prior to all security interests . . . to the extent of any maintenance and nuisance- 18 abatement charges incurred by the association on” the unit and nine months’ worth of HOA 19 20 21 30 Id. (quoting SFR I, 334 P.3d at 412). 22 31 Id. at 9. 23 32 SFR I, 334 P.3d at 410 (citing Nev. Rev. Stat. § 116.3116(1)). 33 Id. 1 dues.34 That nine-months-of-assessments-plus-maintenance-and-nuisance-abatement-charges 2 portion of the lien is the superpriorty piece, and its foreclosure extinguishes a first deed of trust.35 3 Because liens are essentially debt security, they may be “lost by payment or tender of the 4 proper amount of the debt secured by the lien.”36 The Nevada Supreme Court has held that 5 satisfaction of the full superpriority portion of the lien will preserve a deed of trust. In Bank of

6 America, N.A. v. SFR Investments Pool 1, LLC (“Diamond Spur”), the Court explained that such 7 a tender “cure[s] the default and prevent[s] foreclosure as to the superiority portion of the HOA’s 8 lien by operationof law.”37 “Thus, underth[is] split-lien scheme, tender of the superpriority 9 portion of an HOA lien satisfies that portion of the lien by operation of law.” And when an HOA 10 forecloses on the entire lienpost-tender, the sale is “void as to the superpriority portion” because 11 the tender “cured the default as to the superpriority portion of the HOA’s lien.”38 12 Although the Diamond Spur court evaluated such a tender on behalf of the lender, the 13 Nevada Supreme Court heldthat a homeowner’s tender of the superpriority piece saved the deed 14 of trust from extinguishment in its unpublished disposition in Saticoy Bay LLC Series 2141

15 Golden Hill v. JPMorgan Chase Bank.39 The Court found that the district court properly granted 16 summary judgment in favor of the bank because the record “contain[ed] undisputed evidence 17 that the former homeowner made payments sufficient to satisfy the superpriority component of 18 34 Id. 19 35 Id. at 409–11. 20 36 Bank of America, N.A. v. SFR Investments Pool 1, LLC (“Diamond Spur”), 427 P.3d 113, 117 (Nev. 2018) (quoting Power Transmission Equip. Corp. v. Beloit Corp., 201 N.W.2d 13, 16 21 (Wis. 1972)). 22 37 Id. at 120. 38 Id. at 121. 23 39 Saticoy Bay LLC Series 2141 Golden Hill v. JPMorgan Chase Bank,2017 WL 6597154 (Nev. Dec. 22, 2017) (unpub.). 1 the HOA’s lien and that the HOA applied those payments to the superpriority component of the 2 former homeowners’ outstanding balance.”40 So, “at the time of the foreclosure sale, there was 3 no superpriority component of the HOA’s lien that could have extinguished [the] deed of 4 trust.”41 5 These tender cases demonstrate that it is the legal effect of the payment, not the identity

6 of the payor,that matters. If the HOA has accepted payment and applied it to pay off the pre- 7 notice-of-lien assessments and all maintenance or nuisance-abatement charges, the superpriority 8 portion of the lien is discharged, and the foreclosure sale can only be onthe subpriority piece. 9 And because thesubpriority portion of the HOA’s lien stands behind the deed of trust in the 10 priority line, that foreclosure cannot extinguishthe deed of trust. 11 Saticoy Bay points out that theNevada Supreme Court noted in a footnote in another 12 unpublished case, SFR v. Wells Fargo Bank, that the Golden Hill court merelyassumed without 13 deciding that a homeowner payment can cure thesuperpriority default, sothis court should put 14 no stock in GoldenHill.42 But that assumption was foundational to the Golden Hill Court’s

15 affirmation of the district court’s grant ofsummary judgment in favor of the bank. So, I find that 16 Golden Hill—in conjunctionwith the scores of cases in which the Nevada Supreme Court has 17 found that tender of the superpriority amount by a bank, its loan servicer, or its attorneyoperates 18 to discharge the lien and preserves the deed of trust—indicates that a homeowner tender of the 19 full superpriority amount, when actually applied to the charges that comprise the superpriority 20 21 22 40 Id. at *1. 41 Id. 23 42 ECF No. 55 at 11 (quoting SFR Invs.Pool 1, LLC v. Wells Fargo Bank, N.A., 2018 WL 6609670(Nev. Dec. 13, 2018)(unpub.)). 1 amount, will likewise discharge that portion of the lien and save the deed of trust from 2 extinguishment under Nevada law. 3 2. Acosta’s payment discharged the superpriority portion of the lien, 4 saving Wilmington’s deed of trust from extinguishment. 5 The record in this case establishes without genuine dispute that homeowner Acosta’s 6 payment wiped out the full superpriority portion of the HOA’s lien. Although the Resident 7 Delinquency Detail for this property does not providearunningbalance for the account, it does 8 reflect several undisputed facts: the HOA dues on this property were $54 per quarter, the 9 homeowner made a $536.14 payment on April 30, 2013, and there were no maintenance or 10 nuisance-abatement charges on this property.43 The lack of a rollingbalance makes it difficult to 11 tell from this detail sheet alone what impact the$536.14 payment had.44 The deposition 12 testimonyof Sharon Taylor Bergeron, the FRCP 30(b)(6) representative of the HOA,provides 13 the interpretation necessaryto understand what happened to that payment, however. She 14 testified that it was the HOA’s practice to apply homeowner payments “to the oldest assessments

15 first, and the oldest late fees,”45 and that is why the detail shows a zero balance for all charges 16 before the April 30, 2013, payment. As Bergeron explained,“this is not a rolling balanceledger, 17 this is a transaction applied ledger”; it shows a zero balance “because monies have already been 18 19 43 ECF No. 49-2. That document was accompanied by a certificate of custodian of records that 20 demonstrates that Wilmington could present this accounting document as admissible evidence at trial. The 2010 amendment to Federal Rule of Civil Procedure 56 “eliminate[d] the unequivocal 21 requirement” that evidence must be admissible in its present formin order to be considered at summary judgment. Romero v. Nev. Dep’t of Corr., 673 F. App’x 641, 644 (9th Cir. 2016) 22 (unpublished). Instead, the rule mandates that the substanceof the proffered evidence be admissible at trial. Id.; see alsoFed. R. Civ. P. 56 advisory comm. note to 2010 amendment. 23 44 ECF No. 49-1 at 13. 45 Id. at 17, l. 23–25. 1 applied to it.”46 Bergeron summed up the information on the detail sheet with her final 2 deposition answer: 3 Q: . . . The notice of default was recorded on May 17th, 2012. . . this payment . . . would have cured all of the assessments 4 before that May 17, 2012[,] recorded date, correct? 5 A: Correct.47 6 Bergeron’s testimony establishes that the HOA applied the homeowners’payment to all 7 of the HOA dues that were outstanding before the HOA commenced its action to enforce the 8 lien. And because there is no evidence that maintenance or nuisance-abatement charges were 9 imposed on this property,the record establishes without genuine dispute that no amounts 10 qualifying as superpriority under Nevada law remained at the time of the foreclosure sale.48 11 Saticoy Bay contends that the HOA couldn’t have applied Acosta’s payment to the 12 superpriority amount “because the HOA did not believe that a super priority lien existed.”49 It 13 cites the deposition testimony ofSusan Moses, an employee of the HOA’s agent NAS, for this 14 proposition. But Moses merely testified that she did not know whether NAS had “a specific

15 policyon what the super-priority lien was”in the 2012–14 timeframe.50 Plus, it didn’t matter 16 what the HOA or NAS subjectively believed was asuperpriority-lien charge. Bergeron did not 17 46 Id. at 13. 18 47 Id. at 19, l. 4–11. 19 48 Although additional charges continued to accrue, and the account balance had climbed to $341.36leading up to the foreclosure sale, seeECF No. 49-2 at 5, there is no evidence that the 20 HOAsent another lien notice out after theMarch 2012notice of delinquent assessment lien. As theCourt noted inGolden Hill,such “new unpaid monthly assessments could not have 21 comprised anew superpriority lien absent a new notice of delinquent assessments.”) Golden Hill,2017WL 6597154 at *1 (citing Property Plus Invs., LLC v. Mortgage Elec. Registration 22 Sys., Inc., 401 P.3d 728, 731–32(Nev. 2017)). 49 ECF No. 55 at 11. SaticoyBay cites “exhibit M” as this depositiontranscript, but there is no 23 exhibit M. The transcript of Moses’s deposition is in the record at ECF No. 66-1. 50 ECF No. 66-1 at 32. 1 testify that they applied Acosta’s payment to “superpriority”or “subpriority”portions of the lien; 2 she said that they applied it to satisfy all assessments through April 2013.51 As a matter of law 3 and fact based on this record, those were the only charges that could have comprisedthe 4 superpriority piece of this lien. 5 On this record, Acosta’s payment—which the HOA accepted and applied to all wipe out

6 all assessments due through April 30, 2013—satisfied the full superpriority portion of the HOA’s 7 lien. The foreclosure sale on the entire lien thus resulted in a void sale as to the superpriority 8 portion, the “first deed of trust remained after foreclosure,” and “the HOA could not convey full 9 title to the property.”52 Wilmingtonis therefore entitled to summary judgment on the competing 10 quiet-title claims and a declaration that Saticoy Bay purchased the property subject to the deed of 11 trust.53 Because I grant Wilmington’s requested quiet-titlereliefbased on this tendertheory, I 12 dismiss its remaining quiet-title theories as moot,deny Saticoy Bay’s motion for summary 13 judgment, and deny the HOA’s motionfor summary judgment and Saticoy Bay’s motion to 14 dismiss to the extent thattheychallenge Wilmington’s other quiet-title theories.54

15 16 17 51 ECF No. 49-1 at 19. 18 52 Diamond Spur, 427 P.3d at 121. 19 53 ECF Nos. 39, 50. Because I find in favor of Wilmington on the quiet-title claims based on the homeowner’s tender, defendants’remainingarguments on these claims are moot. See, e.g., 20 Diamond Spur, 427 P.3d at 121 (“A party’s status as a BFP is irrelevant when a defect in the foreclosure proceeding renders the sale void.”). To the extent that Saticoy Bay argues that the 21 foreclosure sale is presumed valid, that argument fails because Wilmington’s tender evidence has demonstrated without genuine dispute that the sale was invalid as to the superpriority portion of 22 the lien. See Shadow Wood,366 P.3d at 1112(noting that these recitals “did not eliminate the equitable authority of the courts to consider quiet title actions when an HOA’s foreclosure deed 23 contains conclusive recitals”). 54 ECF No. 52. 1 C. Saticoy Bay’s remaining arguments 2 Though the bulk of Saticoy Bay’s motion to dismiss challenges Wilmington’s quiet-title 3 claims, it also attacks Wilmington’s unjust-enrichment claim.55 Saticoy Bay contends that the 4 unjust-enrichment claim must be dismissed because Wilmington “did not confer any benefit onto 5 defendant,”and any paymentit did make was voluntary.56 On a motion to dismiss, the court

6 must accept as true all well-pled factual allegations in the complaint.57 And here, Wilmington 7 alleged that Saticoy and the HOA “have benefitted from [its] payment of taxes, insurance[,] or 8 homeowner’s association assessments since the time of the HOA sale.”58 Iinfer from this 9 allegation that Wilmington is allegingthat it made such payments, and because Saticoy is the 10 owner of the property,Saticoy would naturally have benefitted from those payments. These 11 allegations aresufficient under Ashcroft v. Iqbalto survive a motion to dismiss.59 Whether 12 Wilmington can prove those allegations is a separate question—and one that I need not reach 13 because Saticoy did not raise it in its motion for summary judgment.60 14 Wilmington’s unjust-enrichment claim is also not subject to dismissal based on the

15 voluntary-payment doctrine. The doctrine maybe raised as an affirmative defense to an unjust- 16 enrichment claim, and “the defendant bears the burden of proving its applicability.”61 17 18 55 ECF No. 35 at 17. 19 56 Id. at 17–18. 20 57 Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009). 58 ECF No. 31 at 17, ¶ 115. 21 59 Iqbal, 556 U.S. at 679. 22 60 Though Saticoy Baystates in its summary-judgment motionthat it “moves for summary judgment and dismissal of plaintiff’s amended complaint,”seeECF No. 52at 3, it fails to 23 address the unjust-enrichment claim with any argument. 61 Nevada Ass’n Servs., Inc. v. Eighth Jud. Dist. Ct.,338 P.3d 1250, 1254 (Nev. 2014). 1 “Affirmative defenses may not be raised by motion to dismiss”unless “the defense raises no 2 disputed issues of fact.”62 This one raises disputed issues about whether Wilmington made the 3 payments in valid defense of property.63 So Saticoy Bay has not demonstrated a basis to dismiss 4 this claim. I thus deny the remainder of Saticoy Bay’s motionto dismiss. 5 D. The HOA’s remaining arguments

6 Most of the HOA’s arguments in its motions to dismiss and for summary judgment are 7 mooted by the grant of summary judgment in Wilmington’s favor on the quiet-title claims. Two 8 remain viable,however: (1) its argument that Wilmington’s claims are time-barred,64 and (2) its 9 argument that Wilmington’s claims are barred by laches.65 10 Although Wilmington initiated this suit about two and a half years after the foreclosure 11 sale, it sued only Saticoy Bay.66 Wilmington did not amend its complaint to add claims against 12 the HOA until just this year—fouryears and 159 days after the foreclosure sale.67 190 days of 13 that delay werespent in mediation with the NevadaReal Estate Division, andunder NRS 38.350, 14 the statutes of limitationsonsuch mediated claims were tolled duringthat process. Subtracting

15 those 190 days, Wilmington’s claims against the HOA were effectively filed 3years and 334 16 days after they accrued.68 17 18 19 62 Scott v. Kuhlmann, 746 F.2d 1377, 1378 (9th Cir. 1984). 63 SeeNevada Ass’n Servs., 338 P.3d at 1254(identifying the exceptions to the doctrine). 20 64 ECF Nos. 39 at 9(HOA MTD),50 at 10(HOA MSJ). 21 65 ECF Nos. 39 at 10,50 at 11. 22 66 SeeECF No. 1. 67 ECF No. 31. 23 68 Wilmington does not make a case for its clams against the HOA relating back to the original complaint. 1 The HOA contends that all of Wilmington’s claims against it are governed by the three- 2 year statute of limitations in NRS 11.190(3). Wilmington concedes that its negligence and 3 negligence per se claims are untimely and agrees totheir dismissal.69 So I grant the HOA’s 4 motion to dismiss Wilmington’s seventh and eighth causes of action. 5 Wilmington’s quiet-titleclaims are not governed by NRS 11.190(3). That statutegoverns

6 actions “upon a liability created by statute, other than a penalty or forfeiture.”70 Wilmington’s 7 quiet-title claims, however titled,are not actions uponaliability created by statute; they are 8 equitable actions to determine adverse interests in real property, as codified in NRS 40.010.71 9 Section 40.010 does not create liability,and a party cannot impose liability upon another through 10 that statute. Rather, the statute allows for a proceeding to determine adverse claims to property. 11 Even if I interpret Wilmington’s quiet-title claims as claims under NRS 116.3116, it still does 12 not seek to impose liability under that statute. So NRS 11.090(3)(a) does not applyto these 13 claims. Instead, I have found—andmaintain—that these equitable quiet-title claims are 14 governed by the four-year statute of limitations in NRS 11.220.72 Because the non-tolled delay

15 in filing these claims against the HOA was less than four years, I find that they are timely. 16 Wilmington’s remaining claims for unjust enrichment, breach of contract, breach of the 17 covenant of good faith and fair dealing,and misrepresentation do not arise from liability created 18 by statute, so they, too, are not governed by NRS 11.190(3). The deadline to file a 19 20 69 ECF No. 43 at 3. 21 70 Nev. Rev. Stat. § 11.190(3)(a). 71 Seesupraat p.4; Shadow WoodHOA, 366 P.3d at 1111 (recounting that “NRS 40.010 22 essentially codified the court’s existing equity jurisprudence” (comma omitted)). 72 SeeBank of New York Mellon v. 4655 Gracemont Ave. Tr.,2019 WL 1598745, at *3–5(D. 23 Nev. Apr. 12, 2019). I incorporate the statute-of-limitations analysis from Gracemont as though set forth fully herein. 1 misrepresentationclaim inNevadais three years,73 so I dismiss that claim as time-barred. The 2 statute of limitations forunjust-enrichment claims in Nevada is four years,74 and for the contract 3 claims, six years.75 Factoring in tolling, those claims were timely filed, so I deny the motion to 4 dismiss them as time-barred. 5 Finally, the HOA contends that, to the extent that Wilmington’s claims are not time-

6 barred by their applicable limitationperiods, they are barred by the doctrine of laches. The 7 doctrine is an equitable one that “may be invoked when delay by one party works to the 8 disadvantage of the other, causing a change of circumstances [that] would make the grant of 9 relief to the delaying party inequitable.”76 “The condition of the party asserting laches must 10 become so changed that the party cannot be restored to its former state.”77 “Thus,laches is more 11 than a mere delay in seeking to enforce one’s rights; it is a delay that works to the disadvantage 12 of another.”78 13 The HOA has not shown that Wilmington’s delay has caused a change in the HOA’s 14 circumstances that would make relief here inequitable. It contends that, had it known that

15 Wilmington would seek to invalidate the foreclosure sale, “it could have postponedthe sale or 16 taken other action to protect its interests and limit its liabilities.”79 But this argument would be 17 18 73 Nev. Rev. Stat. § 11.190(3)(d). 19 74 In re Amerco Derivative Litig., 252 P.3d 681, 703 (Nev. 2011) (citing Nev. Rev. Stat. §11.190(2)(c)). 20 75 Nev. Rev. Stat. § 11.190(1)(b). 21 76 Carson City v. Price,934 P.2d 1042, 1043 (Nev. 1997)(quoting Building & Constr. Trades v. Public Works,836 P.2d 633, 636–37 (Nev. 1992)). 22 77 Id.(quoting Home Savings v. Bigelow,779 P.2d 85, 86 (Nev. 1989)). 23 78 Id. 79 ECF Nos. 39 at 10; 50 at 11. true of most litigated disputes, and laches cannot be triggered by the failure to avoid litigation 2||alone. Indeed, the delay that the laches defense “‘contemplates[] is not delay in bringing claims the attention of the defendant. It is delay on the part of the plaintiff in instituting litigation on A} [its] claims.”®° The HOA has not identified any post-foreclosure prejudice that it suffered 5|| because of Wilmington’s delay, other than having to defend this suit. But “[dJifficulties caused 6|| by the pendency of a lawsuit, and not by delay in bringing the suit[,] do not constitute prejudice 7|| within the meaning of the laches doctrine.”*! The HOA has not demonstrated that any of 8]| Wilmington’s claims are barred by the doctrine of laches. 9 Conclusion 10 The net result of these motions is that Wilmington is entitled to partial summary judgment in its favor on the competing quiet-title claims and a declaration that the deed of trust survived the foreclosure sale, and that Wilmington’s claims for negligence, negligence per se, misrepresentation are dismissed. So, this case proceeds to trial on Wilmington’s unjust- enrichment claim against Saticoy Bay and the HOA, and on its claims against the HOA for 15|| breach of contract and breach of the implied covenant of good faith and fair dealing. But before 16]| that, the parties will be ordered to a settlement conference with the magistrate judge. 17 IT IS THEREFORE ORDERED that: 18 e Saticoy Bay LLC Series 206 Valerian’s Motion to Dismiss [ECF No. 35] is 19 DENIED; 20 e Cinnamon Ridge Community Association’s Motion to Dismiss [ECF No. 39] is 1 GRANTED in part and DENIED in part. Wilmington’s claims for negligence, Danjaq LLC v. Sony Corp., 263 F.3d 942, 953 (9th Cir. 2001) (quoting Nealey v. Transportacion Maritima Mexicana, S. A., 662 F.2d 1275, 1280 n.6 (9th Cir. 1980)). 23} 31 Save the Peaks Coal. v. U.S. Forest Serv., 669 F.3d 1025, 1033 (9th Cir. 2012) (quoting Shouse v. Pierce Cnty., 559 F.2d 1142, 1147 (9th Cir. 1977)). 17

negligence per se, and misrepresentation are dismissed; the motion is denied in all 2 other respects; 3 e Wilmington Trust’s Motion for Summary Judgment [ECF No. 49] is A GRANTED. Wilmington Trust is entitled to summary judgment in its favor on its and Saticoy Bay’s quiet-title claims and a declaration that the deed of trust ° survived the foreclosure sale; 6 e Cinnamon Ridge Community Association’s Motion for Summary Judgment 7 [ECF No. 50] is DENIED; and 8 e Saticoy Bay’s Motion for Summary Judgment [ECF No. 52] is DENIED. 9 The parties are ORDERED to a settlement conference with the magistrate judge, so this case is referred to the magistrate judge to schedule that settlement conference. 11 Dated: September 26, 2019 (BES US. District Ji Jennifer Al. Dorsey 13 14 15 16 17 18 19 20 21 22 23