First 100, LLC v. Rted Nevada, LLC

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 10, 2020
• Docket: 18-17364
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUN 10 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

FIRST 100, LLC, No. 18-17364

Plaintiff-counter- D.C. No. defendant-Appellee, 2:17-cv-01438-JCM-CWH

v. MEMORANDUM* RTED NEVADA, LLC,

Defendant-counter-claimant- cross-claimant-Appellant,

v.

SCOTT B. OLIFANT; et al.,

Cross-defendants-Appellees.

Appeal from the United States District Court for the District of Nevada James C. Mahan, District Judge, Presiding

Submitted June 8, 2020** San Francisco, California

Before: M. SMITH and HURWITZ, Circuit Judges, and ROYAL,*** District

* 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). Judge.

Robert Oggins bought a Nevada residence with a loan secured by a deed of

trust. In 2013, Cenlar FSB acquired the deed of trust, naming Trustee Corps as

trustee. After Oggins failed to pay property assessments, Valley del Paradiso

Homeowners Association (“the HOA”) mailed a Notice of Foreclosure Sale to

Trustee Corps. The HOA subsequently acquired the Oggins property at a

nonjudicial foreclosure sale on February 3, 2014. First 100, LLC eventually

purchased the property, and Omni Financial, LLC later acquired an interest in it.

In 2014, First 100 brought this quiet title action against Cenlar in Nevada state

court. After acquiring the deed of trust in 2016, RTED Nevada, LLC (“RTED”) was

named a defendant and crossclaimed against the HOA, Omni, the United States

(which had a tax lien on the subject property), and others. After the government

removed the action to federal court, the district court dismissed First 100’s complaint

with prejudice, and granted summary judgment to the HOA, finding that the 2014

foreclosure sale extinguished the Cenlar deed of trust. We have jurisdiction over

RTED’s appeal under 28 U.S.C. § 1291.1 We vacate and remand.

*** The Honorable C. Ashley Royal, United States District Judge for the Middle District of Georgia, sitting by designation. 1 After the district court dismissed First 100’s complaint, the government did not pursue relief below and, although a named appellee, has disclaimed any interest in the outcome of this appeal. First 100 did not appeal the district court’s dismissal of its complaint.

2 Under Nevada law, “proper foreclosure of the superpriority piece of the

[HOA’s] lien extinguishes a first deed of trust.” Nationstar Mortg., LLC v. Saticoy

Bay LLC Series 2227 Shadow Canyon, 405 P.3d 641, 642 (Nev. 2017). The Nevada

statutes required the HOA to mail notice of a foreclosure sale to each “person with

an interest whose interest or claimed interest is subordinate” to its lien, Nev. Rev.

Stat. § 107.090(2)(b), (3), using the “last known address” as indicated on the

publicly recorded deed of trust, U.S. Bank, Nat’l Ass’n ND v. Res. Grp., LLC, 444

P.3d 442, 446 (Nev. 2019) (quoting Nev. Rev. Stat. § 107.080(3), (4)).

RTED argues that summary judgment to the HOA was improper because

RTED presented evidence that Cenlar did not receive notice of the foreclosure sale.

The HOA presented evidence that it mailed the statutorily required notice to Trustee

Corps. See Nev. Rev. Stat. § 107.090(2)(b), (3). But, a trustee’s authority is

generally limited to exercising “the power of sale with respect to the property,” see

Nev. Rev. Stat. § 107.080(1), (2)(c), and the record contains no evidence that Trustee

Corps had broader agency on behalf of Cenlar.

The HOA’s agent testified that its standard “procedure was to send certified

mail, return receipt” to all lienholders with subordinate interests. However, the agent

remembered nothing about this particular sale, and had no other evidence of service

on Cenlar. Nor does the record contain any evidence that Cenlar had actual notice

of the sale, a factor in establishing substantial compliance with the Nevada statutes.

3 See Collegium Fund LLC Series 16 v. Deutsche Bank Nat’l Tr. Co., No. 74879, 2019

WL 2743518, at *1 (Nev. June 26, 2019); see also Saticoy Bay LLC Series 9050 W.

Warm Springs 2079 v. Nev. Ass’n Servs., 444 P.3d 428, 435 (Nev. 2019).2 On this

record, genuine factual disputes precluded summary judgment for either party.3

VACATED AND REMANDED.

Each party to bear its own costs.

2 Contrary to the HOA’s assertions, the statutory presumption of validity of a foreclosure sale does not apply if the HOA does not satisfy or substantially comply with the statutory requirements. See Shadow Wood HOA v. N.Y. Cmty. Bancorp, Inc., 366 P.3d 1105, 1110 (Nev. 2016). 3 We accordingly decline to address the district court’s denial of RTED’s motion for leave to amend its answer. The district court can address that motion anew on remand.