Bank of America, N.A. v. T-Shack, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: December 8, 2021
• Docket: 20-15627
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS DEC 8 2021 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

BANK OF AMERICA, N.A., FKA No. 20-15627 Countrywide Home Loans Servicing LP, on behalf of BAC Home Loans Servicing LP, D.C. No. 2:16-cv-01451-KJD-DJA Plaintiff-Appellee,

v. MEMORANDUM*

T-SHACK, INC.,

Defendant-Appellant,

and

WESTTROP ASSOCIATION; NEVADA ASSOCIATION SERVICES, INC.,

Defendants.

Appeal from the United States District Court for the District of Nevada Kent J. Dawson, District Judge, Presiding

Submitted December 6, 2021** San Francisco, California

Before: WARDLAW, BRESS, and BUMATAY, Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). T-Shack appeals the district court’s order granting summary judgment in

favor of Bank of America, N.A. (“Bank of America”) and declaring that Bank of

America’s interest in the property located at 5155 W. Tropicana Avenue, unit 2050,

Las Vegas, Nevada survived the nonjudicial foreclosure. We review de novo a grant

of summary judgment. Nationstar Mortg. LLC v. Saticoy Bay LLC, Series 9229

Millikan Ave., 996 F.3d 950, 954 (9th Cir. 2021) (“Millikan”). We have jurisdiction

under 28 U.S.C. § 1291, and we affirm.

1. Under Nevada law, a homeowner’s association (“HOA”) may conduct

nonjudicial foreclosures of properties if unpaid dues accrue. See Nev. Rev. Stat.

Ann. § 116.3116(2) (West 2021). Once accrued, the HOA receives a superpriority

lien interest in the property, and a foreclosure pursuant to that lien can extinguish all

other lien interests in the property, including deeds of trust. See id. But federal law

prohibits foreclosure of Federal Housing Finance Agency (“FHFA”) property

without FHFA’s consent. 12 U.S.C. § 4617(j)(3). This is known as the Federal

Foreclosure Bar. It applies if, “at the time of the foreclosure sale, (1) [Freddie Mac]

was in FHFA conservatorship . . .; (2) [Freddie Mac] owned the Deed; and (3)

[Freddie Mac] had an agency relationship with [Bank of America], the beneficiary

of record on the Deed.” Millikan, 996 F.3d at 955. An effective foreclosure requires

FHFA’s consent. 12 U.S.C. § 4617(j)(3); see also Berezovsky v. Moniz, 869 F.3d

923, 929 (9th Cir. 2017). Because the Federal Foreclosure Bar applies here, Freddie

2 Mac’s deed of trust was not extinguished.1

At the time of the foreclosure sale in 2013, Freddie Mac, like its sister

corporation, Fannie Mae, was in FHFA conservatorship.2 See Millikan, 996 F.3d at

955–56. The district court did not err in concluding that the undisputed evidence

showed Freddie Mac owned the deed. Bank of America provided business records

from Freddie Mac’s MIDAS system, excerpts from the Freddie Mac Guide, and a

declaration from a Freddie Mac employee, explaining that Freddie Mac acquired

ownership of the loan in April 2007, which continued through the time of the HOA

sale. The declaration also explained that the Guide governs the contractual

relationship between Freddie Mac and its servicers, including Bank of America, and

that Bank of America was the record beneficiary at the time of the HOA sale.

Finally, contrary to T-Shack’s assertion, Bank of America did not bear the burden

of proving that Freddie Mac did not consent. See Berezovsky, 869 F.3d at 929

(“[T]he statutory language cloaks Agency property with Congressional protection

1 Although the district court held that Bank of America’s tender of the superpriority amount before the HOA sale was an independent ground for granting summary judgment in Bank of America’s favor, and T-Shack made several arguments attacking the tender, “[w]e need not reach [Bank of America’s] alternative excuse of tender arguments because [Freddie Mac’s] Deed was not extinguished as a result of the application of the Federal Foreclosure Bar.” Millikan, 996 F.3d at 959 n.4. 2 The district court properly took judicial notice of the fact that Freddie Mac was in FHFA conservatorship. The fact was easily verifiable through federally maintained websites. See Fed. R. Evid. 201(b).

3 unless or until the Agency affirmatively relinquishes it.”). And as the district court

correctly found, in April 2015, FHFA publicly stated that it has not and will not

consent to the foreclosure of any Fannie Mae or Freddie Mac lien or property interest

in connection with HOA foreclosures of superpriority liens.3

2. T-Shack argues that the Statute of Frauds precludes the Federal Foreclosure

Bar from protecting the deed of trust from extinguishment. This argument is

foreclosed by binding precedent. T-Shack was not a contracting party, and the

Nevada Supreme Court has held that “[t]he defense of the statute of frauds is

personal, and available only to the contracting parties or their successors in interest.”

Millikan, 996 F.3d at 957 (citation omitted). And the fact that the loan was acquired

years ago “undermines the applicability of the statute of frauds.” Id.

3. T-Shack argues that because an assignment to Freddie Mac was not

recorded, Freddie Mac did not have a property interest. This, too, is foreclosed by

binding precedent. “Nevada’s recording statutes do not require [Freddie Mac] to be

identified as the beneficiary of record on the Deed in order to establish its ownership

interest in the loan . . . .” Id. All that’s required is that Bank of America, Freddie

Mac’s loan servicer and agent, “was listed as the beneficiary on the recorded Deed

at the time of the foreclosure sale.” Id. The district court correctly found that Bank

3 The district court properly took judicial notice of the FHFA statement because it was a public document that is available for review on a government website. See Fed. R. Evid. 201(b).

4 of America was listed as the beneficiary on the deed at the time of the sale.

4. T-Shack argues that the 2011 assignment of the deed of trust to Bank of

America divested Freddie Mac of any ownership interest. The district court

correctly rejected this argument. The assignment transferred the beneficial interest

to Bank of America; Bank of America was just a servicing agent for Freddie Mac.

See id. at 954–56.

5. T-Shack argues that because it is a bona-fide purchaser, Freddie Mac

cannot enforce its interest against T-Shack. This argument is foreclosed by binding

precedent. Because it was sufficient that Bank of America was listed as the

beneficiary on the deed of trust, “it [is] [un]necessary to address [T-Shack’s]

argument that it is protected as a bona fide purchaser from the Federal Foreclosure

Bar’s effect.” Id. at 957 (quoting Daisy Tr. v. Wells Fargo Bank, N.A., 445 P.3d

846, 849 (Nev. 2019)).

6. T-Shack argues that the Federal Foreclosure Bar is unconstitutional for

violating due process. The district court properly rejected this argument, which is

foreclosed by binding precedent. Fed. Home Loan Mortg. Corp. v. SFR Invs. Pool

1, LLC, 893 F.3d 1136, 1150–51 (9th Cir. 2018), cert. denied, 139 S. Ct. 1618

(2019).

7. T-Shack and its counsel have pursued several appeals in this court raising

many of the same issues raised here. Many—if not all—of the issues are foreclosed

5 by old and new binding precedent. We now warn T-Shack and its counsel not to

pursue any further meritless appeals of clearly foreclosed claims.

AFFIRMED.