Court Opinion

ID: 4578747
Source: CourtListenerOpinion
Date Created: 2020-10-20 20:00:29.124433+00
Date Added: 2024-06-11T13:41:17.732801
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                               OCT 20 2020
                    UNITED STATES COURT OF APPEALS                         MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

RJRN HOLDINGS, LLC,                            No. 17-15932

              Plaintiff-counter-               D.C. No. 2:15-cv-01257-JCM-NJK
              defendant-Appellee,

 v.                                            MEMORANDUM*

CARRINGTON MORTGAGE
SERVICES, LLC,

              Defendant-Appellant,

BAC HOME LOANS SERVICING, LP,

              Defendant-counter-claimant-
              Appellant,

REX ARCHAMBAULT,

              Counter-defendant-Appellee,

  v.

RH KIDS, LLC,

              Third-party-plaintiff-
              Appellee,

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
  v.

MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,

              Third-party-defendant-
              Appellant.

                    Appeal from the United States District Court
                             for the District of Nevada
                     James C. Mahan, District Judge, Presiding

                          Submitted January 23, 2020**
                       Submission vacated January 31, 2020
                          Resubmitted October 20, 2020
                            San Francisco, California

Before: W. FLETCHER and R. NELSON, Circuit Judges, and SESSIONS,***
District Judge.

       This case is one of many stemming from Nevada’s homeowners’ association

foreclosure statute, Nev. Rev. Stat. § 116.3116. We affirm the district court’s

decision in favor of appellee RH Kids.

       On December 23, 2008, Pulte Mortgage, LLC (the original lender – “OL”)

issued a loan to Rhonda Davis to purchase property. The loan was secured by a

       **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
       ***
              The Honorable William K. Sessions III, United States District Judge
for the District of Vermont, sitting by designation.
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deed of trust, recorded on January 6, 2009. On August 6, 2010, OL assigned its

beneficial interest in the deed of trust to BAC Home Loans Servicing, LP (“BAC”).

The assignment was recorded on August 11, 2010.

      Pursuant to Nev. Rev. Stat. § 116.3116, the Hacienda North Homeowners’

Association (“HOA”) claimed a superpriority lien on Davis’s property for

assessments, based on the property’s Covenants, Conditions, and Restrictions. On

April 12, 2011, Absolute Collection Services, LLC (“ACS”), acting on behalf of

HOA, recorded a notice of delinquent assessment lien indicating that Davis owed

$1,074.00. On July 18, 2011, ACS recorded a notice of default and election to sell,

which indicated that Davis owed $2,009.41. Then, on November 10, 2011, ACS

recorded a notice of trustee’s sale, which indicated Davis owed $3,530.72.

      On January 30, 2012, BAC, as the assignee of the beneficial interest in the

deed of trust on Davis’s property, sent a letter via counsel to ACS “requesting and

offering to pay the superpriority amount ‘upon presentation of adequate proof.’”

On February 17, 2012, ACS responded, in relevant part,

      [I]n conversations past, you had stated your clients [sic] position of
      paying for 9 months of assessments . . . all occurring before foreclosure
      by your client.

      I am making you aware that it is our view that without the action of
      foreclosure, a 9 month Statement of Account is not valid. At this time,
      I respectfully request that you submit the Trustees Deed Upon Sale

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      showing your client’s possession of the property and the date that it
      occurred. At that time, we will provide a 9 month super priority lien
      Statement of Account.

      . . . We recognize your client’s position as the first mortgage company
      as the senior lien holder. Should you provide us with a recorded Notice
      of Default or Notice of Sale, we will hold our action so your client may
      proceed.

(Emphasis in original). BAC took no further action.

      On April 17, 2012, HOA conducted a foreclosure sale, at which Rex

Archambault bought the property for $5,000, approximately eight percent of the

property’s fair market value. In February 2014, Archambault quitclaimed the

property to RJRN Holdings, LLC (“RJRN”), which quitclaimed the property to RH

Kids, LLC (“RHK”) in December 2015.

      On June 16, 2015, RJRN filed a complaint (prior to quitclaiming the

property to RHK) against Davis, HOA, and the present Defendants. RHK, after

receiving the property, filed a third-party complaint against the present Defendants

on April 28, 2016, “alleging two causes of action: (1) quiet title; and (2) injunctive

relief.” The parties filed cross-motions for summary judgment. The district court

denied Defendants’ motion for summary judgment and granted RHK’s motion.

      We review de novo cross-motions for summary judgment. Pintos v. Pacific

Creditors Ass’n, 605 F.3d 665, 674 (9th Cir. 2010). “A plea to quiet title does not

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require any particular elements, but each party must plead and prove his or her own

claim to the property in question and a plaintiff’s right to relief therefore depends

on superiority of title.” Chapman v. Deutsche Bank Nat’l Trust Co., 302 P.3d
1103, 1106 (Nev. 2013) (internal quotation marks and citations omitted).

        Appellants argue (1) that their correspondence with ACS constituted valid

tender; (2) alternatively, that ACS’s response to BAC’s offer constituted a rejection

of tender, which would excuse formal tender; and (3) even if the court rejects the

first and second arguments, that equity requires that we set aside the foreclosure

sale.

        We thought that the result of this case might be controlled by a Nevada

Supreme Court decision, Bank of Am., N.A. v. Thomas Jessup, LLC Series VII, 435
P.3d 1217, 1218 (Nev. 2019) (Jessup I). After learning that the Nevada Supreme

Court would be rehearing Jessup I en banc, we withdrew submission pending that

Court’s decision. After the Nevada Supreme Court issued its en banc decision,

Bank of America, N.A. v. Thomas Jessup, LLC Series VII, 452 P.3d 255 (Nev.

2020) ( Jessup II), appellants filed a 28j letter informing us of the decision.

Appellants filed a motion to lift the stay we had entered pending the decision in

Jessup II, Dkt. No. 56, which we now grant. As it turns out, the Nevada Supreme

Court’s decision in Jessup II was unpublished and does not control the outcome in

                                           5
this case. Nev. R. App. P. 36(c)(2).

      However, another intervening case does control the outcome. In 7510 Perla

Del Mar Avenue Trust v. Bank of America, N.A., 458 P.3d 348, 349 (Nev. 2020),

the Supreme Court of Nevada evaluated correspondence that was identical in

substance to the correspondence here. The correspondence “requested that [the

letter’s recipient] identify the superpriority portion of the lien—i.e., the amount the

Bank may rightfully pay to preserve its deed of trust—and offered to pay that sum

upon proof of the same.” Id. The Supreme Court of Nevada held that the

correspondence did not constitute valid tender. Id. Based on Perla del Mar, we

conclude that the district court was correct in the case before us in concluding that

there was no valid tender.

      If ACS had “a known policy of rejecting any payment for less than the full

lien amount,” BAC’s “obligation to tender the superpriority portion of the lien”

would have been excused. Id. at 351. BAC points only to the language of the

correspondence to support its contention that ACS had such a policy. BAC’s

contention, relying solely on the language of the letter, that ACS had a known

policy of rejecting payment cannot survive summary judgment. Finally, appellants

argue “that equity required setting aside the foreclosure sale” even if tender was

not excused. The district court was correct in its rejection of that argument.

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      The other issues raised do not change our conclusion. The Nevada statute is

not preempted by the Federal Housing Administration’s mortgage insurance

program. Bank of Am. v. Arlington West Twilight Homeowners Assoc., 920 F.3d
620, 624 (9th Cir. 2019). And BAC’s facial due process challenge fails because

Bourne Valley Court Tr. v. Wells Fargo Bank, NA, 832 F.3d 1154 (9th Cir. 2016),

no longer controls the analysis. Arlington, 920 F.3d at 623–24. Finally, because

there was no valid tender, RHK provided sufficient evidence that it was a bona fide

purchaser that provided value without knowledge or notice of an earlier interest.

See Nev. Rev. Stat. § 111.180(1); see also Bailey v. Butner, 176 P.2d 226, 234

(Nev. 1947). Even assuming that RHK had a duty to inquire whether the

superpriority amount was tendered, the fact of the foreclosure sale itself satisfied

this duty.

      AFFIRMED.

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