Jpmorgan Chase Bank v. 7290 Sheared Cliff Ln. Un. 102

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 19, 2020
• Docket: 18-16190
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS FEB 19 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

JPMORGAN CHASE BANK, N.A., and No. 18-16190 FEDERAL NATIONAL MORTGAGE ASSOCIATION, D.C. No. 2:17-cv-00225-JCM-NJK

Plaintiffs-Appellees, MEMORANDUM* v.

7290 SHEARED CLIFF LANE UN 102 TRUST,

Defendant-Appellant.

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

Submitted February 7, 2020** Pasadena, California

Before: BOGGS,*** IKUTA, and LEE, 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). *** The Honorable Danny J. Boggs, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation. 7290 Sheared Cliff Lane Un 102 Trust (“Trust”) appeals the district court’s

grant of summary judgment in favor of plaintiffs JPMorgan Chase Bank, N.A.

(“Chase”) and Federal National Mortgage Association (“Fannie Mae”) in a case

concerning a foreclosure on a real property in Las Vegas, Nevada (“Property”). We

have jurisdiction pursuant to 28 U.S.C. § 1291, and we review de novo a district

court’s grant of summary judgment. Gordon v. Virtumundo, Inc., 575 F.3d 1040,

1047 (9th Cir. 2009). We affirm.

Fannie Mae acquired the loan for the Property in 2003. Chase is the

authorized servicer of the loan for Fannie Mae. In 2013, the Trust purchased the

Property at a homeowners’ association’s non-judicial foreclosure sale. The

homeowner’s association (“HOA”) foreclosed on the property under a Nevada law

that grants an HOA a “superiority” lien for certain unpaid dues. See Nev. Rev. Stat.

§ 116.3116; Saticoy Bay LLC Series 9641 Christine View v. Fed. Nat’l Mortg. Ass’n,

417 P.3d 363, 365 (Nev. 2018) (en banc). Chase and Fannie Mae challenged the

foreclosure sale and sought to preserve their pre-sale interest in the Property, seeking

declaratory relief and to quiet title, as well as alleging unjust enrichment. They

argued, inter alia, that the Federal Foreclosure Bar, 12 U.S.C. § 4617(j)(3), barred

the HOA’s foreclosure sale from extinguishing Fannie Mae’s beneficial interest in

the Property. The district court granted Chase and Fannie Mae’s motion for

summary judgment on their quiet-title claims and dismissed the causes of action

2 requesting declaratory relief. The district court did not address quiet-title claims

based on constitutional arguments or the unjust-enrichment claim, which were pled

in the alternative. The Trust timely appealed.

The Federal Housing Finance Agency (“FHFA”) is the conservator of Fannie

Mae. See 12 U.S.C. §§ 4511, 4617. The Federal Foreclosure Bar provides that “[n]o

property of the Agency shall be subject to levy, attachment, garnishment,

foreclosure, or sale without the consent of the Agency, nor shall any involuntary lien

attach to the property of the Agency.” 12 U.S.C. § 4617(j)(3). The FHFA did not

affirmatively consent to the foreclosure sale. The Trust argues that FHFA’s consent

should be implied, but this argument is unavailing. See Berezovsky v. Moniz, 869

F.3d 923, 929 (9th Cir. 2017) (“[T]he statutory language cloaks Agency property

with Congressional protection unless or until the Agency affirmatively relinquishes

it.”). Without the consent of the FHFA, the foreclosure sale of the Property was

unlawful. See id. at 933.

The Trust argues that Nev. Rev. Stat. §116.3116 granted the HOA a

superiority lien that had priority over the beneficial interest of Fannie Mae, and that

the foreclosure sale extinguished Fannie Mae’s interest in Property. However, “the

Federal Foreclosure Bar supersedes the Nevada superpriority lien provision.”

Berezovsky, 869 F.3d at 931; see also Fed. Home Loan Mortg. Corp. v. SFR Invs.

Pool 1, LLC, 893 F.3d 1136, 1147 (9th Cir. 2018) (“We see no cause to disturb our

3 precedential decision, and continue to hold that the Federal Foreclosure Bar

preempts the Nevada Foreclosure Statute.”), cert. denied, 139 S. Ct. 1618 (2019).

The Trust argues that the Federal Foreclosure Bar does not apply because the

FHFA is not a party in this action and because Fannie Mae did not provide adequate

evidence of its interest in the Property at the time of sale. FHFA is the conservator

of Fannie Mae. Fannie Mae provided business records—and a declaration of its

employee explaining the business records—to confirm Fannie Mae’s ownership of

the loan since 2003 as well as Chase’s status as its loan servicer. Under Berezovsky

and its progeny, this constitutes sufficient evidence of Fannie Mae’s ownership of

the loan “even if the recorded deed of trust names only the owner’s agent,” which is

here Fannie Mae’s loan servicer, Chase. 869 F.3d at 932. We also reject the

argument that, since FHFA is not a party, 12 U.S.C. § 4617(j)(1) precludes Chase’s

and Fannie Mae’s reliance on the Federal Foreclosure Bar, because we have held

that “the Federal Foreclosure Bar applies to any property for which the Agency

serves as conservator and immunizes such property from any foreclosure without

Agency consent.” Berezovsky, 869 F.3d at 928 (citing 12 U.S.C. § 4617(j)(1), (3)).

The Trust argues that Fannie Mae failed to comply with Nevada’s recording

statutes and therefore lacked an enforceable property interest because the deed of

trust did not name Fannie Mae as the record beneficiary. This argument was rejected

in Berezovsky, 869 F.3d at 932–33 & n.8; see also SFR Invs. Pool 1, 893 F.3d at

4 1149. The Nevada Supreme Court confirmed that Nevada’s recording statutes do

not require that “[Fannie Mae] must be identified as the beneficiary on the publicly

recorded deed of trust to establish its ownership interest in the subject loan” for the

purposes of the Federal Foreclosure Bar. Daisy Tr. v. Wells Fargo Bank, N.A., 445

P.3d 846, 847 (Nev. 2019) (en banc).

The Trust also argues the constitutionality of the Nevada superpriority lien

provision, seemingly rebuking Fannie Mae’s and Chase’s district-court argument

relying on Bourne Valley Court Tr. v. Wells Fargo Bank, NA, 832 F.3d 1154 (9th

Cir. 2016). But Fannie Mae and Chase do not raise this argument on appeal.

Additionally, this court has already recognized in light of the Nevada Supreme

Court’s decision in SFR Investments Pool 1, LLC v. Bank of New York Mellon, 422

P.3d 1248 (Nev. 2018) that “Bourne Valley no longer controls the analysis” and

“Nev. Rev. Stat. § 116.3116 et seq. is not facially unconstitutional.” Bank of Am.,

N.A. v. Arlington W. Twilight Homeowners Ass’n, 920 F.3d 620, 624 (9th Cir. 2019).

We therefore do not need to address this issue.

AFFIRMED.1

1 FHFA’s Motion for Leave to Participate as an Amicus Curiae (ECF No. 27) is GRANTED. 5