N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
KAL-M OR -USA, LLC , a Ne va da lim i te d lia bility c om pa ny , Plaintiff - Appe lla nt,
v. B ANK OF AM E R IC A, N.A.; e t a l., De fe nda

nts - Appe lle e s. No. 13-16591 D.C . No. 2:13-c v-00680-LDGVC F
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Distric t of Ne v a da L loy d D. Ge orge , Se nior Distric t Judge , Pre siding

Subm itte d August 10, 2015 ** San Fran c isc o , C a lifornia B e fore : REINHAR

DT, TASHIM A, a

nd C A LLAHAN, C irc uit Judge s. Appe lla nt Ka l-M or-USA, LLC (“ Ka l -M o r-USA” ) a p pe a ls the dism issa l of its suit to quie

t titleon a prope rty loc ate d at

3047 C a s e y

Drive , Unit 103, in La s Ve ga s, Ne va da . B e c a

use the pa rtie s a re fam ilia r with thefa c ts a

nd proc e dura l 

# FIL ED AUG 27 2015 M OLLY C. DW Y ER, CLERK U
. S
. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by 9th C ir. R . 36-3. ** The pa

ne l una nim ously c onc lude s this c a se is suita ble for de c ision without oral a

rgum e nt. Se e Fe d. R . App. P. 34(a)(2).history , we do not re sta te the m e xc e pt a s ne c e ssa

ry to e xpla in our de c ision. W e have jurisdic tion unde r 28 U.S.C . § 1291, a nd we re ve rse and re m and for furthe r proc e e dings. 1. The distric t c ourt dismisse d Ka l-M or-USA’ s suit ba s e d on its de te rm i nation tha

t a hom e o wne r’ s a ssoc iation’ s (“ HOA” ) nonjudic ia l fore c losure ba se d on a

supe r-priority

lie n unde r Ne va da la

wdoe s not e xtinguish a

first se c urity de e d of trust. Howe ve r, the Ne va da Supre m e C o urt ha s sinc e he l d in S F R Inv e stme nts Pool 1, LLC

v . U.S. Bank

, N .A. , 334 P.3d 408 (Ne v. 2014), tha t a n HOA ha s a

true supe r-priority l ie n on a prope rty for nine m onths of unpai d
a sse ssm e nts, a

nd fore c losure on this lien e x t inguishe s a ll othe r inte re sts in tha t prope rty . Ac c ordingly , the distric t c ourt’ s dismissa l, to thee xte nt it wa s ba se d on a
c ontra ry inte rpre tation of theNe va d a HOA supe r-priority

sta tutory sc he m e , wa s e rrone ous. Se e

, e .g. , Oly mpicSports Prods., Inc . v . Univ e r sal Athle ticSale

s C o. ,760 F.2d 910, 913 (9th C ir. 1985) (fe de ra l c ourts “ are bound to follow the de c isions of a

sta te ’ s highe st c o urt in interpre ting tha t sta te ’ s la w” ) (c ita tion
om i tte d). 2. Appe lle e s a

rgue tha t the dism issa l of the suit wa s prope r be c a use , inte r a l ia , the HOA’ s sa le of the C a se y Drive prope rty

wa s c om m e rc ia lly
unre a s ona

ble . Ne ve rthe l e ss, “ i na d e qua c y of pric e , howe ve r gross, is not in itse lf a 2suffic i e nt ground”for se tting a s ide a sa le a s c om

m e rc ia lly unre a sona

ble , be c a use

“ the re m ust be in a ddition to proof of som e e le m e nt of fra

ud, unfa irne ss, or oppre s sion a s a c c o unts for a nd brings a

bout theina de qua c y

of pric e .” Brunze ll v
. W oodbury , 449 P.2d 158, 159 (Nev. 1969) (c ita tion omitte d). Appe lle e s have not ide ntifie d a

ny ground a side from

the low pric e whic h m i ght re nde r the sa le s c om m e rc ia lly unre a sona

ble
. Although the Ne v a da Supre m e C ourt la

t e r he ld tha

t HOA supe r-priority

lie n fore c losure s e xtinguish first de e d s of trust, tha t holding did not re nde r the sa le s c om m e rc ia lly unre a sona

ble at the tim e the sa le s oc c urre d. W e a c c ordingly RE VER SE the distric t c ourt’ s dismi ssa l a nd REM AND for furthe r proc e e dings. This rem and is without pre j udic e to a

ny c onstitutiona

l
argum e nts thepa

rtie s m ay m a ke be low, whic h the distric t c ourt m ay a ddre ss in the first insta nc e . W e note tha

t the Stat e of Ne va da

or the Fe de ra l Housing Fina nc e Age nc y m ay wish to interve ne in the proc e e dings be low, in light of the possible
c onstitutiona

l issue s tha

t the distric t c ourt m a

y a ddre ss on re m and. RE V E RSE D AND RE M ANDE D.

3