SATICOY BAY, LLC SER. 34 INNISBROOK v. THORNBURG MORTG. SEC. TR. 2007-3

2022 NV 35, 510 P.3d 139
CourtNevada Supreme Court
DecidedMay 26, 2022
Docket80111
StatusPublished
Cited by4 cases

This text of 2022 NV 35 (SATICOY BAY, LLC SER. 34 INNISBROOK v. THORNBURG MORTG. SEC. TR. 2007-3) is published on Counsel Stack Legal Research, covering Nevada Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
SATICOY BAY, LLC SER. 34 INNISBROOK v. THORNBURG MORTG. SEC. TR. 2007-3, 2022 NV 35, 510 P.3d 139 (Neb. 2022).

Opinion

138 Nev., Advance Opinion 3.5 IN THE SUPREME COURT OF THE STATE OF NEVADA

SATICOY BAY, LLC, SERIES 34 No. 80111 INNISBROOK, Appellant, vs. THORNBURG MORTGAGE SECURITIES TRUST 2007-3; FRANK TIMPA; MADELAINE TIMPA; TIMPA TRUST; RED ROCK FINANCIAL SERVICES, LLC; SPANISH TRAIL MASTER ASSOCIATION; REPUBLIC SERVICES; AND LAS VEGAS VALLEY WATER DISTRICT, Respondents.

Appeal from a district court final judgment in an action to quiet title and distribute interpleaded funds. Eighth Judicial District Court, Clark County; Gloria Sturman, Judge. Affirmed.

Roger P. Croteau & Associates, Ltd., and Roger P. Croteau, Las Vegas, for Appellant Saticoy Bay, LLC, Series 34 Innisbrook.

Kravitz Schnitzer Johnson Watson & Zeppenfeld, Chtd., and Gary E. Schnitzer, Las Vegas; Troutman Pepper LLP and Aaron D. Lancaster, Atlanta, Georgia, for Respondent Thornburg Mortgage Securities Trust 2007-3.

Gregory J. Walch, Las Vegas, for Respondent Las Vegas Valley Water District.

SUPREME COURT OF NEVADA

2.2 111107 (0) I947A .40). Koch & Scow LLC and David R. Koch and Steven B. Scow, Henderson, for Respondent Red Rock Financial Services, LLC.

Leach Kern Gruchow Anderson Song and Sean L. Anderson and Ryan D. Hastings, Las Vegas, for Respondent Spanish Trail Master Association.

Avalon Legal Group LLC and Bryan Naddafi and Elena Nutenko, Las Vegas; The Law Office of Travis Akin and Travis D. Akin, Las Vegas, for Respondents Frank Timpa, Madelaine Timpa, and Timpa Trust.

Williams Starbuck and Drew J. Starbuck and Donald H. Williams, Las Vegas, for Respondent Republic Services.

Hanks Law Group and Karen L. Hanks and Chantel M. Schimming, Las Vegas, for Amicus Curiae SFR Investments Pool 1, LLC.

BEFORE THE SUPREME COURT, EN BANC,

OPINION

By the Court, STIGLICH, J.: The Great Recession of 2008 brought with it a wave of foreclosures. This case stems from a quiet title action involving one of those foreclosed properties located in a homeowner's association (HOA) community and sold by the HOA to a subsequent purchaser at a foreclosure sale. In the alternative to seeking quiet title, the subsequent purchaser asserted a misrepresentation claim against the HOA and its agent based upon their failure to disclose and publicly record that the servicer of the original loan for the property had tendered the superpriority portion of the

SUPREME COURT HONs lien prior to the sale. OF NEVADA

(0) 1947A oleo 2 After concluding that this court has jurisdiction over this appeal, we hold that the subsequent purchaser failed to sufficiently allege that the HOA or its agent misrepresented information regarding a tender. In addition, to the extent that the misrepresentation claim was premised on a failure to proactively record that a tender had been made, we hold that the claim failed as a matter of law because there was no statutory duty for an HOA to record a tender of the superpriority portion of the lien on the property before 2015, when the Legislature amended NRS 116.31164(2) to so provide. Next, we determine that the district court did not err by awarding the property's previous owner the excess proceeds from the sale and awarding the HOA agent the attorney fees and costs it incurred in connection with the sale. Finally, we conclude that the district court did not abuse its discretion by denying the subsequent purchaser's motion for reconsideration and its motion to amend its complaint. Therefore, we affirm the district court's judgment in full. BACKGROUND In 2006, respondent Timpa Trust obtained a loan from Countrywide Home Loans, Inc., to purchase a property within an HOA, respondent Spanish Trail Master Association, for roughly $3.8 million. The loan was secured by a deed of trust on the property.' Mortgage Electronic Registration Systems, Inc., was the initial deed of trust beneficiary and assigned the deed of trust to respondent Thornburg Mortgage Securities Trust 2007-3 in 2010. Bank of America, N.A. (BANA) was the servicer of the loan. Timpa Trust stopped making payments on the loan in 2008. Around the same time, Timpa Trust also stopped paying the monthly

'Frank and Madelaine Timpa, both of whom are now deceased, conveyed the property to Timpa Trust shortly after purchasing it. SUPREME COURT OF NEVADA

On 1947A .441gt.. 3 assessment to Spanish Trail. As a result, Spanish Trail—through its agent, respondent Red Rock Financial Services—recorded a notice of delinquent assessment lien against Timpa Trust's property and later a notice of default and election to sell. The notice asserted the sale would "be made without covenant or warranty, express or implied regarding . . . title or possession, encumbrance, obligations to satisfy any secured or unsecured liens." Before the foreclosure sale, BANA tendered the superpriority portion of Spanish Trail's lien, but Red Rock rejected the tender. Appellant Saticoy Bay, LLC, Series 34 Innisbrook, purchased the property at the foreclosure sale for roughly $1.2 million in November 2014.2 Saticoy Bay thereafter filed the underlying quiet title action against Thornburg and alternatively asserted a misrepresentation claim against Spanish Trail and Red Rock for failing to disclose BANA's superpriority tender. Thornburg in turn asserted claims against Saticoy Bay, Spanish Trail, Timpa Trust, and Red Rock, requesting a declaration that its deed of trust survived the foreclosure sale. Red Rock sought to interplead the funds from the foreclosure sale that exceeded the HOA lien on the property (excess proceeds). Saticoy Bay, Thornburg, and Spanish Trail each sought summary judgment, and the district court denied these competing motions by oral order.3 Prior to the district court's entry of a written order, Thornburg moved for reconsideration. The district court

2Saticoy Bay observes that the high purchase price (relative to that of other foreclosure properties) was due to the sale being held shortly after this court's decision in SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 130 Nev. 742, 334 P.3d 408 (2014), which held that an HOA's foreclosure of the superpriority portion of its lien could extinguish the first deed of trust.

3Red Rock joined Spanish Trail's countermotion for summary judgment.

4 converted Thornburg's motion for reconsideration into a motion for summary judgment. The court then granted summary judgment in favor of Thornburg, holding that Saticoy Bay's interest was subject to Thornburg's deed of trust in light of BANA's superpriority tender. The district court also sua sponte dismissed with prejudice Saticoy Bay's misrepresentation claim against Spanish Trail and Red Rock. Timpa Trust subsequently filed a motion for summary judgment to recover the excess proceeds pursuant to NRS 116.31164. Red Rock also made a claim to the excess proceeds and sought the attorney fees and costs that it incurred in connection with holding the foreclosure sale, which Timpa Trust did not challenge. Saticoy Bay disagreed, arguing that the funds should be distributed to Thornburg and applied to the outstanding loan balance. Thornburg did not respond to Timpa Trust's motion. The district court granted summary judgment for Timpa Trust, awarding Timpa Trust the excess proceeds less an award to Red Rock of roughly $29,000 in attorney fees and costs. Saticoy Bay thereafter moved for reconsideration. In addition, Saticoy Bay argued that the district court should have awarded the excess proceeds to Thornburg.

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Bluebook (online)
2022 NV 35, 510 P.3d 139, Counsel Stack Legal Research, https://law.counselstack.com/opinion/saticoy-bay-llc-ser-34-innisbrook-v-thornburg-mortg-sec-tr-2007-3-nev-2022.