Title: Anthony S. Noonan IRA, LLC v. U.S. Bank National Ass'n EE

State: nevada

Issuer: Nevada Supreme Court

Document:

197 Nev., Advance Opinion [5
IN THE SUPREME COURT OF THE STATE OF NEVADA

ANTHONY S. NOONAN IRA, LLC; LOU No. 78624
NOONAN; AND JAMES M. ALLRED.
TRA, LLC,

oe FILED

U.S. BANK NATIONAL ASSOCIATION
EE; AND NATIONSTAR MORTGAGE, APR 15 2021

LLC, a
Respondents, SPs
rr PT

Appeal from a district court summary judgment in an action to
Quiet title to real property. Eighth Judicial District Court, Clark County;
Kerry Louise Earley, Judge.

Affirmed.

 

Shumway Van and Michael C. Van and Garrett R. Chase, Las Vegas,
for Appellants.

Akerman LLP and Ariel E. Stern, Melanie D. Morgan, and Scott R.
Lachman, Las Vegas,
for Respondents.

BEFORE THE COURT EN BANC.

 

 
OPINION"

By the Court, STIGLICH, J.:

INTRODUCTION

At issue in this appeal is the construction of NRS 116.3116(2)
(2009), commonly referred to as Nevada's “superpriority lien” statute. As
relevant here, the statute gives a homeowners association's (HOA) lien
Priority over a first deed of trust with respect to the HOA’s “assessments for
common expenses based on the periodic budget adopted by the
(HOA)... which would have become due in the absence of acceleration
during the 9 months immediately preceding institution of an action to
enforce the lien.” NRS 116.3116(2) (emphasis added). Here, respondents’
predecessor attempted to satisfy the HOA’s superpriority lien by tendering
a check equaling 9 months’ worth of assessments. But the HOA had
imposed a yearly assessment, such that the entire yearly assessment
became due “during the 9 months immediately preceding” when the HOA
took action to enforce its lien. The district court granted summary judgment
for respondents, evidently reasoning that the HOA’s imposition of an

1A panel of this court originally issued an opinion resolving this
matter. See Anthony S. Noonan IRA, LLC v. U.S. Bank Nat'l Ass'n EE, 136
Nev., Adv. Op. 41, 466 P.3d 1276 (2020). On January 25, 2021, we granted
respondents U.S. Bank National Association and Nationstar Mortgage’s
petition for en bane reconsideration of that decision. Having reconsidered
the matter, we vacate the panel's July 9, 2020, opinion and issue this
opinion in its place. Relatedly, on February 8, 2021, appellants Anthony S.
Noonan IRA, LLC, Lou Noonan, and James M. Allred IRA, LLG, filed a
motion requesting that this matter be scheduled for oral argument. That
motion is denied,

 

°This was the applicable version of the statute during this case's
pertinent time frame and is the version addressed by this opinion.

 

 
annual assessment “accelerat(ed|” the assessments’ due date, such that
respondents were not required to tender more than 9 months of assessments
to satisfy the superpriority portion of the HOA’s lien. We agree with the
district court's construction of NRS 116.3116(2) and affirm the judgment.
FACTS AND PROCEDURAL HISTORY

‘The HOA in this case charged annual assessments of $216,
which became due every January. When the homeowners did not pay their
2011 assessment, the HOA recorded a notice of lien for delinquent
assessments in April 2011. The predecessor of respondents U.S. Bank
National Association and Nationstar Mortgage (collectively, U.S. Bank), the
beneficiary of the first deed of trust on the property, requested the
superpriority amount from the HOA’s foreclosure agent. After receiving a
ledger of assessments and payments from the foreclosure agent, U.S. Bank's
predecessor tendered $162 to the foreclosure agent in August 2011. The
tendered amount represented 9 months out of 12 months of assessments
based on the $216 yearly assessment amount.‘ Despite the tender, the HOA
continued with the foreclosure sale, and in 2014, appellants Anthony S.
Noonan IRA, LLC, Lou Noonan, and James M. Allred IRA, LLC

8We have previously held that under the version of NRS 116.3116
applicable here, the HOA’s notice of lien for delinquent assessments
institutes an action to enforce an NRS 116.3116 lien. Saticoy Bay LLC
Series 2021 Gray Eagle Way v. JPMorgan Chase Bank, N.A., 133 Nev. 21,
25-26, 388 P.3d 226, 231 (2017).

 

‘We have previously held that a valid superpriority tender is effective
to prevent an HOA’s foreclosure from extinguishing a first deed of trust.
Bank of Am., N.A. v. SFR Invs. Pool 1, LLC, 134 Nev. 604, 612, 427 P.3d
113, 121 (2018).

 

 
 

(collectively, Noonan), purchased the property at the HOA’s foreclosure sale
for $50,100.

Noonan then filed a complaint against U.S. Bank, seeking to
quiet title to the property. After initially denying U.S. Bank’s motion for
summary judgment and its subsequent motion for reconsideration, the
nn for summary judgment.
‘The district court concluded that the tender of the equivalent of 9 months’

 

district court granted U.S. Bank's renewed m¢

worth of the annual assessment amount cured the default on the
superpriority portion of the HOA’s lien because Nevada law limited the
superpriority portion of an HOA’s lien to 9 months’ worth of assessments.
And, because the tender cured the superpriority default, the district court
concluded that the foreclosure sale did not extinguish U.S. Bank’s first deed
of trust. Consequently, the district court found that Noonan took title to
the property subject to U.S. Bank's deed of trust.
DISCUSSION

Noonan argues that the district court erred by concluding the
tender by U.S. Bank's predecessor satisfied the superpriority portion of the
HOA's lien, contending the
116.3116(2) and thereby miscalculated the amount U.S. Bank's predecessor

 

istrict court erroneously construed NRS

had to tender. “This court reviews a district court's grant of summary
judgment and its statutory construction determinations de novo.” Estate of
‘Smith ex rel. Smith v. Mahoney's Silver Nugget, Inc., 127 Nev. 855, 857, 265
P.3d 688, 690 (2011).

NRS 116.3116(2) provides that the superpriority portion of an
HOA’s lien consists of “assessments for common expenses . . . which would
have become due in the absence of acceleration during the 9 months
immediately preceding institution of an action to enforce the lien.”
(Emphasis added.) Noonan argues that this provision gives the HOA’s

4

 
on

 

entire annual assessment superpriority status because that assessment
became due in the 9 months preceding the notice of delinquent assessment.
In particular, Noonan argues that because NRS 116.3115(1) (2009)
permitted the HOA to impose assessments “at least annually,” and because
the HOA did so in this case, there was no “acceleration” because the
assessments were due in their entirety on an annual basis.

We are not persuaded by Noonan’s proffered construction of
NRS 116.3116(2), as it renders the phrase “in the absence of acceleration”
meaningless. Leven v. Frey, 123 Nev. 399, 405, 168 P.3d 712, 716 (2007)
(ISltatutory interpretation should not render any part of a statute

meaningless ...."). While an HOA’s imposition of an annual assessment

 

may, in the abstract, not be an “acceleration,” Noonan does not explain what,

 

“in the absence of acceleration” means if the statute did not presuppose the
imposition of monthly assessments and account for the possibility of an
annual assessment. In this respect, the commentary to the Uniform
Common Interest Ownership Act of 1982, 7 U.L.A., part II (2009) (amended
1994, 2008) (UCIOA), upon which the Legislature based NRS 116.3116(2),
supports the conclusion that NRS 116.3116(2) presupposes the imposition
of monthly assessments. Cf. SFR Invs. Pool 1, LLC v. U.S. Bank, N.A., 130
Nev. 742, 744, 334 P.3d 408, 410 (2014) (relying on the UCIOA’s

Additionally, and although it did not occur in this case, Noonan's
proffered construction could have absurd results. Cf. Leven, 123 Nev. at
405, 168 P.3d at 716 (“[A] statute's language should not be read to produce
absurd or unreasonable results.” (internal quotation omitted). For
example, if an HOA imposes an annual assessment in January and does not
mail its notice of lien for delinquent assessment until November (i.e., more
than 9 months after the annual assessment became due), no portion of the
HOAs lien would have superpriority status.

 

 
commentary to interpret NRS 116.3116), superseded by statute on other
grounds as stated in Saticoy Bay LLC 9050 W Warm Springs 2079 v. Nev.
Assin Servs., 135 Nev. 180, 444 P.3d 428 (2019). The commentary explains
that the purpose of the 9-month® superpriority lien provision is to “strikel |
an equitable balance between the need to enforce collection of unpaid
assessments and the obvious necessity for protecting the priority of the
security interests of lenders.” UCIOA § 3-116 emt. 1, 7 U.L.A., part II 121-
24 (2009). In furtherance of this purpose, we conclude that NRS
116.3116(2)s use of “in the absence of acceleration” accounts for the
situation that occurred here, where the HOA imposed an annual
assessment but a secured lender paid 9 months’ worth of assessments.
Accordingly, when an HOA imposes an annual assessment all
at once, there has been an “acceleration” under NRS 116.3116(2). Thus,
even when an HOA imposes an annual assessment, the superpriority
portion of the HOA’s lien can be satisfied by tendering 9 months’ worth of
assessments.’ Because U.S. Bank's predecessor made such a tender in this
case, the district court correctly determined that the HOA's foreclosure sale
did not extinguish the first deed of trust and that Noonan took title to the

"The UCIOA refers to a 6-month superpriority lien. See UCIOA § 3-
116 emt. 1, 7 U.L.A., part II 121-24 (2009).

"NRS 116.3116(2) also provides that maintenance and nuisance-
abatement charges are afforded superpriority status. See NRS 116.3115.
We clarify that if an HOA imposes such charges, those charges must also be
paid to satisfy the superpriority portion of the HOA’s lien.

 

 
property subject to that deed of trust.* We therefore affirm the summary
judgment in favor of U.S. Bank.

— Abgod

Stiglich
We concur:
tees, CJ.
Hagdesty
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Parraguirre

Petty ;
Pickering
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Herndon

“Noonan raises other arguments on appeal in support of reversal. To
the extent that those arguments are not belied by the record or were not
recently rejected in Saticoy Bay LLC Series 133 McLaren v. Green Tree
Servicing LLC, 136 Nev., Adv. Op. 85, 478 P.3d 376, 379 (2020), we are not
persuaded that reversal is warranted.

 

 

 

 

 
SILVER,

 

with whom CADISH, J., agrees, dissenting:
‘The statutory language of NRS 116.3116(2) (2009) is plain and
unambiguous. In providing that the amounts subject to superpriority
status are those that “would have become due in the absence of acceleration
during the 9 months immediately preceding institution of an action to

 

enforce the lien,

 

is clear that, if yearly assessment becomes due in the
9 months preceding the notice of delinquent assessments, the entirety of the
assessment is subject to superpriority status. See Saticoy Bay LLC Series
2021 Gray Eagle Way v. JPMorgan Chase Bank, N.A. (Gray Eagle), 133 Nev.
21, 26, 388 P.3d 226, 231 (2017) (“IA] party has instituted proceedings to
enforce the lien . .. when it provides the notice of delinquent assessment.”
(internal quotation marks omitted). In that sense, the 9-month limitation
mentioned in the statute speaks only to which assessments are subject to
superpriority status—the assessments that become due, absent
acceleration, in the 9 months preceding the institution of the lien
enforcement action. And the yearly assessment at issue in this case was
not an acceleration; Nevada law permits yearly assessments, and the
parties agree that assessments were always due on a yearly basis. See NRS
116.3115(1) (2009) (providing that “assessments must be made at least
annually, based on a budget adopted at least annually” (emphasis added));
Acceleration, Black's Law Dictionary (10th ed. 2014) (defining “acceleration”
as “[tJhe act or process of quickening or shortening the duration of
something, such as payments”).

While parties and this court often refer to the superpriority lien

as being equal to 9 months’ worth of assessments, see, eg., Bank of Am.,
NA. v. SFR Invs. Pool 1, LLC, 134 Nev. 604, 606, 427 P.3d 113, 117 (2018);
Horizons at Seven Hills Homeowners Ass'n v. Ikon Holdings, LLC, 132 Nev,

 

 
362, 371, 373 P.8d 66, 72 (2016), in those cases the court is referring to
assessments assessed monthly, rather than yearly, such that those cases
are factually distinguishable from the present one. And any reliance on
secondary sources or public policy to conclude that the entirety of the yearly
assessment amount does not have superpriority status is unwarranted
when the statute at issue is unambiguous, as itis here. See JED Prop., LLC
v. Coastline RE Holdings NV Corp., 131 Nev. 91, 94, 343 P.3d 1239, 1241
(2015) (‘We do not look to other sources ... unless a statutory ambiguity
requires us to look beyond the statute's language to determine the
legislative intent.”); see also 9352 Cranesbill Tr. v. Wells Fargo Bank, N.A.,
136 Nev. 76, 78-79, 459 P.3d 227, 230 (2020) (applying a foreclosure
statute's plain language despite comments to the Uniform Common Interest
Ownership Act suggesting a contrary interpretation). Because I conclude

that the entirety of the yearly assessment at issue in this case is subject to

Liter):

superpriority status, I dissent.

 

 

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