Order Granting Defendant's Motion for Summary Judgment
[ECF Nos. 74, 82, 102]
JENNIFER A. DORSEY, District Judge.
Martha Espiritu stopped paying her home mortgage, and after living in her home rent free for nearly two years, the defendant banks foreclosed on her. Although someone bought the home at public auction in the summer of 2015, Espiritu continues to live there.
Espiritu brings this action asking that I unwind that foreclosure sale. She does not deny that she has not paid her mortgage in several years. Instead, she contends that I should void the sale because the defendants made some minor procedural mistakes during the foreclosure process (such as failing to ensure that a toll-free number was in a disclosure). The defendants deny that they made any procedural mistakes during the foreclosure, and they contend that, in any event, these mistakes do not warrant unraveling a foreclosure sale. I previously dismissed most of Espiritu's causes of action without leave to amend, but I allowed her to proceed with a single cause of action against defendants for violating Nevada's foreclosure statute, NRS 107.080.
Espiritu primarily brings her claim under NRS 107.080(8). But this section offers no help to her now that the home has been sold and title transferred—it is a remedy available only to the current titleholder and only for future sales. Espiritu argues that I should interpret NRS 107.080(8) as allowing those who held title at the time of the sale (as Espiritu did) to challenge a foreclosure. But this statute makes clear who can bring a challenge prior to a sale, and who can bring one after. And Espiritu is in the first camp.
Espiritu also argues that I should unwind the sale under NRS 107.080(5). But this provision applies only if the defendants failed to substantially comply with the statute's procedural requirements. The undisputed evidence shows that, although the defendants may have made some technical mistakes, they substantially complied with the requirements of the foreclosure process. I therefore grant the defendants' motion.
Espiritu purchased her home in early 2003 with a mortgage.
Espiritu does not dispute that she was in default, and remains in default, on her mortgage obligations. Nor does she dispute that the notice of foreclosure was recorded with the county or that she continues to reside in the home despite that a third party purchased it more than a year ago. Instead, she disputes whether the defendants properly followed all of the procedures for foreclosing on real property set out in NRS 107.080. Espiritu accuses the defendants of failing to:
For evidence to support these allegations, Espiritu largely relies on her own testimony that she did not receive the notices or that she did not see them. Defendants provide ample evidence that they mailed or recorded each document that they were supposed to.
A. Summary-judgment standards.
The legal standard governing the parties' motions is well settled: a party is entitled to summary judgment when "the movant shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law."
When considering a motion for summary judgment, I view all facts and draw all inferences in the light most favorable to the nonmoving party.
If the moving party shows that there is no genuine issue as to any material fact, the burden shifts to the nonmoving party, who must "set forth specific facts showing that there is a genuine issue for trial."
B. Espiritu is not entitled to relief under NRS 107.080(8).
Nevada Revised Statute NRS 107.080 lays out the hoops that lenders must jump through to foreclose on a home. This statute also provides specific mechanisms that homeowners can use to challenge the foreclosure process.
The parties primarily dispute whether Espiritu is entitled to relief under subsection 8 of this statute. This provision allows the person who "holds title of record" to challenge an upcoming foreclosure sale if the trustee does "not comply with any requirement" of NRS 107.080. This subsection expressly provides its remedy: "An injunction enjoining the exercise of the power of sale until the . . . trustee complies with the requirements" of NRS 107.080(2)-(4) (which imposes notice and disclosure requirements for carrying out the foreclosures).
Espiritu argues that she can use this statute to void the past sale of her home—despite that she no longer "holds title" and that the statute only authorizes an injunction to stop an upcoming "exercise" of a sale. She points out that another subsection of NRS 107.080, subsection 5, allows courts to "declare void" a prior sale, and that subsection 6 allows the person who "holds title of record on the date the notice of default" to take certain actions. Espiritu believes that subsection 8 somehow incorporates these provisions. But her interpretation is not reasonable.
Subsection 8 expressly limits who can use it: those who "hold title of record." It also expressly limits the remedies available: an injunction against the "exercise" of the sale—in other words, an injunction stopping the sale from happening in the first place. As the Ninth Circuit has explained, under Nevada law, the "foreclosure sale terminates all [the prior owner's] legal and equitable interests in the land."
The other provisions that Espiritu points to cut against her arguments. The Ninth Circuit has already explained that the remedies in subsection 8 are distinct from those in NRS 107.080's other sections.
C. Espiritu is not entitled to relief under NRS 107.080(5).
Defendants suggest that I have already dismissed Espiritu's claim under NRS 107.080(5), so they largely ignore this provision in their briefing. But I never mentioned subsection 5 in my prior decision. I ruled that Espiritu's tort of wrongful foreclosure failed because she is in default, but I did not address a claim under subsection 5.
But even assuming that Espiritu can bring a subsection 5 claim, she has not demonstrated a triable issue for this claim either. Subsection 5 authorizes a court to void a completed foreclosure under narrow, specified circumstances. Espiritu must show not just that the defendants committed some technical violation, but that they failed to "substantially comply" with the procedures in NRS §§ 107.086 and 107.087. Even when defendants have failed to post a notice of default on a property, filed notices late, or posted warning of the sale later than they should have—courts have held that they substantially complied so long as the homeowner received notice of the sale and cannot demonstrate any resulting harm.
Espiritu admits that she saw the notice of default and the election to sell for her property, so she had notice of the sale. She admits that she was—and remains in—default, and she has not provided any evidence that she could have cured that default. So she has not shown any harm. Defendants provide ample evidence that they sent Espiritu all of the required notices and disclosures.
Espiritu does point out a couple of minor problems with the defendants' foreclosure process. But she has not shown that these minor violations were material. Indeed, the evidence indicates that Espiritu was provided this missing information in other disclosures.
Accordingly, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the defendants'
IT IS FURTHER ORDERED that Espiritu's objections to Magistrate Judge Leen's decision