Saticoy Bay LLC Series 452 v. Green Tree Servicing, LLC

• Court: Court of Appeals for the Ninth Circuit
• Decided: September 8, 2020
• Docket: 19-16355
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS SEP 8 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

SATICOY BAY LLC SERIES 452 No. 19-16355 CROCUS HILL, D.C. No. Plaintiff-counter- 2:15-cv-00977-RFB-CWH defendant-Appellant,

v. MEMORANDUM*

QUALITY LOAN SERVICE CORPORATION,

Defendant-Appellee,

GREEN TREE SERVICING, LLC,

Defendant-counter-claim- 3rd-party-plaintiff- Appellee,

v.

SAN MARCOS AT SUMMERLIN HOMEOWNERS ASSOCIATION; ASSESSMENT MANAGEMENT SERVICES,

Defendants-third-party- defendants.

Appeal from the United States District Court

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. for the District of Nevada Richard F. Boulware II, District Judge, Presiding

Submitted September 2, 2020** Seattle, Washington

Before: HAWKINS and McKEOWN, Circuit Judges, and KENDALL, *** District Judge.

Plaintiff-Appellant Saticoy Bay LLC Series 452 Crocus Hill appeals the

district court’s order denying its motion for summary judgment and granting

summary judgment for Defendant-Appellee Green Tree Servicing, LLC. We have

jurisdiction under 28 U.S.C. § 1291, and our review is de novo. Berezovsky v.

Moniz, 869 F.3d 923, 927 (9th Cir. 2017). We affirm.

In 2014, Saticoy Bay purchased the subject property at a homeowners

association (“HOA”) foreclosure sale. The property was encumbered by a note

and deed of trust that had been purchased by the Federal National Mortgage

Association (“Fannie Mae”) in 2003. At the time of Saticoy Bay’s purchase,

Green Tree, Fannie Mae’s servicer, was the record beneficiary of the deed of trust.

Saticoy Bay sued Green Tree and the trustee on the deed of trust, seeking, among

other relief, a declaratory judgment that it was the rightful owner of the property.

** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Virginia M. Kendall, United States District Judge for the Northern District of Illinois, sitting by designation.

2 Green Tree counterclaimed, asserting, among other claims, a claim for a

declaratory judgment that its interest remained on the property superior to the

interests of Saticoy Bay. Relying on the Federal Foreclosure Bar, 12 U.S.C. §

4617(j)(3), the district court ruled in favor of Green Tree and concluded that its

ruling resolved all other claims, counterclaims, and third-party claims in the

matter.

The district court correctly concluded that the Federal Foreclosure Bar

operated here to protect Fannie Mae’s interest. The Federal Foreclosure Bar

applies to property for which the Federal Housing Finance Agency (the “Agency”)

“serves as conservator and immunizes such property from any foreclosure without

Agency consent.” Berezovsky, 869 F.3d at 928; see also Fed. Home Loan Mortg.

Corp. v. SFR Invs. Pool 1, LLC, 893 F.3d 1136, 1140 (9th Cir. 2018) (noting that

Fannie Mae has been under the Agency’s conservatorship since 2008). The

Federal Foreclosure Bar prevents an HOA foreclosure sale executed under

Nevada’s superpriority lien law, Nev. Rev. Stat. § 116.3116, from extinguishing

the interest of the Agency in the property as conservator without the Agency’s

consent. Berezovsky, 869 F.3d at 931; see also SFR Invs. Pool 1, 893 F.3d at

1146–47.

Saticoy Bay does not dispute that the Agency served as Fannie Mae’s

conservator at the time of the foreclosure sale or that the Agency did not consent to

3 the sale. What Saticoy Bay does dispute is whether Fannie Mae held an interest in

the property. Per Nevada law, Fannie Mae “remains a secured creditor with a

property interest in the collateral” if its agent (i.e., servicer) is named in the

recorded deed of trust. See Berezovsky, 869 F.3d at 932. Contrary to Saticoy

Bay’s arguments, Green Tree properly established that Fannie Mae owned the loan

at the time of the sale and that Green Tree serviced it. To show this, Green Tree

submitted business records and an accompanying employee declaration from

Fannie Mae, as well as Fannie Mae’s servicing guide. Both this Court and the

Supreme Court of Nevada have held that similar evidence is sufficient to prove

ownership of the loan and status as a servicer. See id. at 932–33 & n.8–9

(determining that database printouts along with servicer guide were sufficient to

establish Freddie Mac’s interest and the servicer relationship); Daisy Tr. v. Wells

Fargo Bank, N.A., 445 P.3d 846, 850 (Nev. 2019) (en banc) (determining that

servicer was not required to introduce servicing agreement or promissory note to

establish servicing relationship and ownership of the loan). Additionally, the

printouts of Fannie Mae’s records were accompanied by a declaration stating that

they were made in the regular course of business by someone with knowledge at

the time of the event, as is required for business records to be admissible, and were

authenticated by an employee familiar with Fannie Mae’s systems. See Fed. R.

Evid. 803(6), 901; see also U-Haul Int’l, Inc. v. Lumbermens Mut. Cas. Co., 576

4 F.3d 1040, 1044–45 (9th Cir. 2009); Wong v. Regents of Univ. of California, 410

F.3d 1052, 1060 (9th Cir. 2005) (“Rulings regarding evidence made in the context

of summary judgment are reviewed for an abuse of discretion.”). Nothing more

was required.

Saticoy Bay’s additional arguments also fail. Saticoy Bay challenges Fannie

Mae’s ownership of the mortgage loan on the grounds that Green Tree cannot

produce a writing showing that Fannie Mae obtained such ownership, per the

statute of frauds requirement in Nev. Rev. Stat § 111.205(1). Nevada law,

however, provides that “[t]he defense of the statute of frauds is personal, and

available only to the contracting parties or their successors in interest.” Harmon

v. Tanner Motor Tours of Nev., Ltd., 377 P.2d 622, 628 (Nev. 1963); see also

Easton Bus. Opp. v. Town Exec. Suites, 230 P.3d 827, 832 n.4 (Nev. 2010).

Because Saticoy Bay was not a party to the assignment of the mortgage loan to

Fannie Mae, it may not assert a statute of frauds defense.1

Saticoy Bay also argues that it is protected under Nevada’s recording

statutes because Fannie Mae’s interest in the property was unrecorded and Saticoy

1 Saticoy Bay’s reliance on Leyva v. Nat’l Default Servicing Corp., 255 P.3d 1275 (Nev. 2011), is also misplaced. Leyva differed in that it involved a question of who was entitled to pursue foreclosure proceedings. Id. at 1279. Saticoy Bay’s reliance on Leyva in the instant context disregards Berezovsky’s and Daisy Trust’s holdings as to what evidence is needed to prove Fannie Mae’s ownership and any servicing relationship.

5 Bay was a bona fide purchaser. See Nev. Rev. Stat. §§ 111.315, 111.325. But

Green Tree’s interest in the property was recorded at the time of the foreclosure

sale, and this was sufficient to establish Fannie Mae’s interest at that time, as the

note owner need not be named on the deed of trust. See Berezovsky, 869 F.3d at

932; cf. Daisy Tr., 445 P.3d at 847 (stating that Nevada’s recording statutes do not

require that the regulated entity “be identified as the beneficiary on the publicly

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

Additionally, here, the original deed of trust provided that the note could be sold

“one or more times without prior notice” and provided that the deed of trust was a

“Fannie Mae/Freddie Mac UNIFORM INSTRUMENT.” Given that Saticoy Bay

had record notice of Green Tree’s adverse interest, that the deed of trust stated the

note could be sold without notice, and that the deed of trust itself suggested it

might have a connection to Fannie Mae, we decline to conclude that Saticoy Bay

was a bona fide purchaser protected by Nevada’s recording statutes. See

Huntington v. Mila, Inc., 75 P.3d 354, 356 (Nev. 2003) (per curiam) (“A

subsequent purchaser with notice, actual or constructive, of an interest in property

superior to that which he is purchasing is not a purchaser in good faith, and is not

entitled to the protection of [Nevada’s] recording act.”); Allison Steel Mfg. Co. v.

Bentonite, Inc., 471 P.2d 666, 668 (Nev. 1970) (noting that a purchaser has a “duty

of inquiry. . . when the circumstances are such that [he] is in possession of facts

6 which would lead a reasonable man in his position to make an investigation that

would advise him of the existence of prior unrecorded rights” (internal quotation

marks omitted)). Given our conclusion, we decline to address whether and to what

extent Nevada’s recording statutes are preempted by the Federal Foreclosure Bar.

Finally, Saticoy Bay argues that the district court improperly granted Green

Tree equitable relief when Green Tree had an adequate remedy at law. This

argument is unavailing because, even assuming (without deciding) that the remedy

granted was equitable, Saticoy Bay does not persuasively refute the proposition

that loss of real property rights constitutes an irreparable harm for which monetary

damages are an inadequate remedy. See, e.g., Dixon v. Thatcher, 742 P.2d 1029,

1030 (Nev. 1987) (noting that “real property and its attributes are considered

unique and loss of real property rights generally results in irreparable harm”).

Saticoy Bay does not persuasively explain or support its brief assertions that some

other adequate remedy at law exists.

AFFIRMED.2

2 The Motion of Amicus Curiae Federal Housing Finance Agency to Participate in Oral Argument (Dkt. No. 40) is denied as moot, as this case was submitted on the briefs and record, without oral argument (Dkt. No. 42).