U.S. Bank, N.A. v. Sfr Investments Pool 1, LLC

Opinion

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS FILED FOR THE NINTH CIRCUIT FEB 23 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS U.S. BANK, N.A., As Trustee for the No. 20-17449 Holders of the Wmalt 2006-AR8 Trust, D.C. No. Plaintiff-counter- 2:15-cv-01423-JCM-PAL defendant-Appellant,

v. MEMORANDUM*

ALESSI & KOENIG, LLC; ANTELOPE CANYON HOMEOWNERS ASSOCIATION,

Defendants-Appellees,

SFR INVESTMENTS POOL 1, LLC,

Defendant-counter-claimant- cross-claimant-Appellee,

v.

NATIONSTAR MORTGAGE LLC; BANK OF AMERICA, NA,

Cross-claim-defendants- Appellants.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Appeal from the United States District Court for the District of Nevada James C. Mahan, District Judge, Presiding

Submitted February 18, 2022** San Francisco, California

Before: McKEOWN and W. FLETCHER, Circuit Judges, and BENNETT,*** District Judge.

U.S. Bank, N.A., Nationstar Mortgage, LLC, and Bank of America, N.A.

(collectively, “Banks”) appeal from the district court’s grant of summary judgment

to SFR Investments Pool 1, LLC (“SFR”) against the Banks in their quiet title

action. Bank of America, N.A. (“Bank of America”) held a deed of trust on the

residential property at issue. The property is subject to the Covenants, Conditions,

and Restrictions of the Antelope Canyon Homeowners Association (“HOA”).

When the homeowner became delinquent on her HOA assessment payments,

Alessi & Koenig, LLC (“A&K”), representing the HOA, foreclosed on the

property. According to Miles, Bauer, Bergstrom & Winters LLP (“Miles Bauer”),

which was retained by Bank of America, Bank of America sent a tender check for

** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Richard D. Bennett, United States District Judge for the District of Maryland, sitting by designation. 2 $1,440 to A&K in an effort to satisfy the HOA’s superpriority lien on the property.

Miles Bauer’s records showed that the check was returned.

On cross motions for summary judgment, the district court granted summary

judgment to SFR. The court held that, in spite of the tender attempt, “SFR is

entitled to a declaratory judgment that the Banks’ first deed of trust was

extinguished pursuant to the properly conducted foreclosure sale.” The Banks

appeal the grant of summary judgment to SFR and the denial of summary

judgment to them.

We have jurisdiction pursuant to 28 U.S.C. § 1291. We review the district

court’s grant of summary judgment de novo. Fed. Home Loan Mortg. Corp. v.

SFR Invs. Pool 1, LLC, 893 F.3d 1136, 1144 (9th Cir. 2018). We reverse the

district court’s grant of summary judgment to SFR and remand for further

proceedings.

Bank of America’s tender letter and check, had they been delivered, would

have preserved its deed of trust on the property.

Under Nevada law, a homeowners’ association has “a superpriority lien that,

when properly foreclosed upon, extinguishes a first deed of trust.” 7510 Perla Del

Mar Ave Tr. v. Bank of America, N.A., 458 P.3d 348, 348 (Nev. 2020) (en banc)

(citing SFR Invs. Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408, 409 (Nev. 2014)

3 (en banc)). The holder of a first deed of trust can, however, preserve its interest

even in the face of an HOA foreclosure “by tendering the superpriority portion of

the HOA’s lien before the foreclosure sale is held.” Id. (citing Bank of America,

N.A. v. SFR Invs. Pool 1, LLC, 427 P.3d 113, 116 (Nev. 2018) (en banc)). “The

full superpriority amount consists of nine months of unpaid HOA dues and any

unpaid charges for maintenance and nuisance abatement.” Bank of America, N.A.

v. Arlington W. Twilight Homeowners Ass’n, 920 F.3d 620, 623 (9th Cir. 2019);

accord SFR Invs., 427 P.3d at 117.

Here, Bank of America wrote a check for nine months of unpaid HOA dues

at a rate of $160 per month. This is sufficient to tender the superpriority lien when

“[t]he ledger d[oes] not indicate that the property had incurred any charges for

maintenance or nuisance abatement.” Arlington, 920 F.3d at 623; accord SFR

Invs., 427 P.3d at 118. In addition, the language that accompanied Bank of

America’s tender letter was not impermissibly conditional. Arlington, 920 F.3d at

623; SFR Invs., 427 P.3d at 118; Saticoy Bay LLC Series 133 McLaren v. Green

Tree Servicing LLC, 478 P.3d 376, 379 (Nev. 2020) (en banc). SFR is therefore

not entitled to summary judgment. Accordingly, we reverse the decision of the

district court in favor of SFR Investments Pool 1, LLC.

4 However, with respect to Bank of America’s cross-motion for summary

judgment, SFR properly raises a genuine dispute of material fact as to whether

delivery of the tender check ever occurred. Though the Banks have produced a

screenshot suggesting that the check was delivered and then returned by A&K,

other evidence indicates that the tender letter and check may not have been

delivered. A&K’s records contain entries that reflect other communications with

Miles Bauer but do not reflect receipt of a tender attempt. Moreover, Miles

Bauer’s tender letter, unlike its other communications with A&K, does not contain

a notation that it was “sent via first class mail.” In the face of this mixed evidence,

summary judgment in favor of the Banks is not appropriate. We therefore remand

for further proceedings.

REVERSED and REMANDED.