Nationstar Mortgage, LLC v. Equity Trust Company Custodian

• Court: Court of Appeals for the Ninth Circuit
• Decided: December 16, 2020
• Docket: 19-17167
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS DEC 16 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

NATIONSTAR MORTGAGE, LLC, No. 19-17167

Plaintiff-counter- D.C. No. 2:15-cv-01744-JAD-EJY defendant-Appellant,

v. MEMORANDUM*

EQUITY TRUST COMPANY CUSTODIAN FBO Z130255; ASHWIN PATEL,

Defendants-counter-claim- 3rd-party-plaintiffs- Appellees,

v.

FRANK ORNELAS; VIRGILIA MUNOZ,

Third-party-defendants.

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

Submitted December 11, 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: TASHIMA, TALLMAN, and MURGUIA, Circuit Judges.

Plaintiff Nationstar Mortgage, LLC (“Nationstar”) appeals from the

summary judgment quieting title to a condominium unit in Nevada in favor of

Defendants Equity Trust Company Custodian FBO Z130255 and Ashwin Patel.

Specifically, Nationstar appeals 1) the district court’s ruling that the subject non-

judicial foreclosure sale should not be set aside because Nationstar presented no

evidence of fraud, unfairness, or oppression that impacted the sale; and 2) the

district court’s rejection of Nationstar’s due process challenge to Nev. Rev. Stat.

§ 116.3116. We review de novo, CitiMortgage, Inc. v. Corte Madera

Homeowners Ass’n, 962 F.3d 1103, 1106 (9th Cir. 2020), and we affirm.

1. Nationstar argues that the district court erred in concluding that there was

no evidence of fraud, oppression, or unfairness that justified setting aside the

foreclosure sale. Under Nevada law, an inadequate price alone is insufficient to set

aside a sale. See Nationstar Mortg., LLC v. Saticoy Bay LLC Series 2227 Shadow

Canyon, 405 P.3d 641, 648–49 (Nev. 2017). There must be “proof of some

element of fraud, unfairness, or oppression as accounts for and brings about the

inadequacy of price.” Id. at 643 (quoting Shadow Wood Homeowners Ass’n v.

N.Y. Cmty. Bancorp., 366 P.3d 1105, 1111 (Nev. 2016) (en banc)). Here, the

district court did not err by ruling that Nationstar failed to raise a material issue of

fact as to whether any fraud, unfairness, or oppression occurred, or that any such

2 alleged behavior impacted the sale.

2. The district court also correctly rejected Plaintiff’s due-process

challenge to Nevada’s pre-2015 foreclosure-notice scheme. The Nevada Supreme

Court has clarified that the statutory scheme requires a mandatory notice of default

and notice of sale to all holders of subordinate interests to a homeowners

association’s superpriority lien. See SFR Invs. Pool 1, LLC v. Bank of N.Y. Mellon,

422 P.3d 1248, 1252–53 (Nev. 2018) (en banc). Such notice adequately informs

holders of subordinate interests that a foreclosure sale is imminent and provides

them an opportunity to protect their interest in the property, which is all that due

process demands in this context. See Wells Fargo Bank, N.A. v. Mahogany

Meadows Ave. Tr., 979 F.3d 1209, 1217–18 (9th Cir. 2020). Contrary to

Nationstar’s argument, the notice provided need not specify the superpriority

portion of a homeowners association’s lien, and it need not notify lien holders of

any specific risk to their deeds of trust. See Bank of Am., N.A. v. Arlington W.

Twilight Homeowners Ass’n, 920 F.3d 620, 622, 624 (9th Cir. 2019) (per curiam)

(upholding the statute’s facial constitutionality notwithstanding the fact that the

deed of trust holder did not receive notice of the superpriority portion of the lien or

provide particularized notice of risk); see also Mahogany Meadows Ave. Tr., 979

F.3d at 1217–18.

AFFIRMED.