Carrington Mortgage Services v. Sfr Investments Pool 1, LLC

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 16 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

CARRINGTON MORTGAGE SERVICES, No. 19-15911 LLC, D.C. No. Plaintiff-counter- 2:17-cv-01530-JAD-PAL defendant-Appellee,

v. MEMORANDUM*

LIBERTY AT MAYFIELD COMMUNITY ASSOCIATION,

Defendant,

and

SFR INVESTMENTS POOL 1, LLC,

Defendant-counter-claimant- Appellant.

Appeal from the United States District Court for the District of Nevada Jennifer A. Dorsey, District Judge, Presiding

Submitted July 14, 2020** San Francisco, California

* 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). Before: IKUTA and HURWITZ, Circuit Judges, and TAGLE,*** District Judge.

In 2009, two individuals purchased a Nevada residence with a loan secured

by a deed of trust; Bank of America later acquired the deed of trust. After the buyers

failed to pay assessments of the Liberty at Mayfield Community Association (the

“HOA”), the HOA recorded a Notice of Default and Election to Sell. Bank of

America’s attorneys obtained the account ledger identifying the total amount due

and tendered a cashier’s check for nine months of HOA dues. The HOA rejected

the tender and sold the property at a nonjudicial foreclosure sale in 2013 to SFR

Investments Pool 1, LLC.

Bank of America later assigned the deed of trust to Carrington Mortgage

Services, LLC. In 2017, Carrington brought this quiet title action against SFR and

the HOA, alleging that the deed of trust still encumbered the property. The district

court entered summary judgment for Carrington. We have jurisdiction over SFR’s

appeal pursuant to 28 U.S.C. § 1291 and affirm.

1. Carrington had standing to bring a quiet title action. Carrington

proffered unrebutted evidence that it was assigned the deed of trust. See Edelstein

v. Bank of N.Y. Mellon, 286 P.3d 249, 260 (Nev. 2012). A quiet title action is simply

a judicial determination of the claimed interests in real property. See Chapman v.

*** The Honorable Hilda G. Tagle, United States District Judge for the Southern District of Texas, sitting by designation.

2 Deutsche Bank Nat’l Tr. Co., 302 P.3d 1103, 1106–07 (Nev. 2013) (citing Nev. Rev.

Stat. § 40.010). A deed of trust establishes the holder’s interest in the property even

if separated from the promissory note. Edelstein, 286 P.3d at 259–60; see also In re

Montierth, 354 P.3d 648, 650–51 (Nev. 2015).

2. Bank of America’s tender satisfied the superpriority portion of the

HOA lien. Because the HOA’s ledger did not list any charges for maintenance or

nuisance abatement, the tender of nine months of HOA dues covered the entire

superpriority amount. See Bank of Am., N.A. v. Arlington W. Twilight Homeowners

Ass’n, 920 F.3d 620, 623 (9th Cir. 2019) (per curiam). Even assuming the tender

letter inaccurately claimed that certain charges were junior to the deed of trust, no

such charges are at issue and thus the purported misstatement did not alter the

tender’s legal effect. See Bank of Am., N.A. v. SFR Investments Pool 1, LLC

(Diamond Spur), 427 P.3d 113, 118, 121 (Nev. 2018) (en banc). And, the

misstatement did not make the tender impermissibly conditional because it did not

require anything of the HOA. See id. at 118; see also Alliant Commercial, LLC v.

Bank of N.Y. Mellon, 443 P.3d 544 (Nev. 2019) (unpublished table decision)

(analyzing a nearly identical tender letter).

3. SFR’s purported status as a bona fide purchaser (“BFP”) does not affect

the result. “A party’s status as a BFP is irrelevant when a defect in the foreclosure

proceeding renders the sale void.” Diamond Spur, 427 P.3d at 121. “A foreclosure

3 sale on a mortgage lien after valid tender satisfies that lien is void, as the lien is no

longer in default.” Id.

AFFIRMED.