Court Opinion

ID: 4150240
Source: CourtListenerOpinion
Date Created: 2017-03-03 21:01:05.502569+00
Date Added: 2024-06-11T07:46:30.320627
License: Public Domain

NOT FOR PUBLICATION                            FILED
                       UNITED STATES COURT OF APPEALS                         MAR 3 2017
                                                                          MOLLY C. DWYER, CLERK
                                                                           U.S. COURT OF APPEALS
                              FOR THE NINTH CIRCUIT

    EQUITY INCOME PARTNERS, LP, an                   No.    14-15388
    Arizona Limited Partnership; GALILEO
    CAPITAL PARTNERS LIMITED, a                      D.C. No. 2:11-cv-01614-SMM
    Cayman Islands Exempted Company,

                    Plaintiffs-Appellants,           MEMORANDUM *

     v.

    CHICAGO TITLE INSURANCE
    COMPANY, a Delaware Corporation,

                    Defendant-Appellee.

                      Appeal from the United States District Court
                               for the District of Arizona
                    Stephen M. McNamee, District Judge, Presiding

                                 Argued March 18, 2016
                                Submitted March 3, 2017
                                San Francisco, California

Before: KLEINFELD, RAWLINSON, and HURWITZ, Circuit Judges.

          On July 12, 2016, we certified the following questions of law to the Arizona

Supreme Court pursuant to Ariz. Rev. Stat. § 12-1862:

          1.    When a lender purchases property by full-credit bid at a trustee’s
                sale, does Section 9 [of the standard form lender’s title insurance

*
      This disposition is not appropriate for publication and is not precedent except
as provided by Ninth Circuit Rule 36-3.
            policies] apply, or does Section 2 apply?

      2.    Is a full-credit bid at a trustee’s sale a “payment” or “payment[]
            made” under Sections 2 or 9 of the policies?

      3.    To what extent does a full-credit bid at a trustee’s sale either (a)
            terminate coverage under Section 2(a)(i) of the policies, or (b)
            reduce coverage under Section 2 and any possible liability under
            Section 7?

Equity Income Partners, LP v. Chi. Title Ins. Co., 828 F.3d 1040, 1045 (9th Cir.

2016).

      On February 7, 2017, the Arizona Supreme Court answered the certified

questions as follows:

      1.    Section 2 applies when a lender purchases property by full-credit
            bid at a trustee’s sale.

      2.    A full-credit bid at a trustee’s sale is not a “payment” under
            Sections 2 or 9 of the policy.

      3.    The full-credit bid neither terminates nor reduces coverage under
            Section 2 or Section 7.1

Equity Income Partners, LP v. Chi. Title Ins. Co., No. CV-16-0162-CQ, --- P.3d ----,

1
      The footnote in the Arizona Supreme Court opinion stated:

      As explained below, the trustee sale may reduce or even eliminate a
      title insurer’s ultimate liability under its policy. However, this
      reduction or elimination is not a function of the credit bid amount.
      Rather, the amount of the reduction, if any, is the fair market value of
      the property the lender receives as a result of its credit bid or, if the
      property is acquired by a third party, the amount that party pays for the
      property.

                                         2
2017 WL 490398, at *1 (Ariz. 2017).

         In light of the Arizona Supreme Court’s answers to the certified questions, we

vacate the district court’s summary judgment and remand for further proceedings

consistent with those answers. Costs are awarded to appellants. Fed. R. App. P.

39(a).

         VACATED and REMANDED.

                                            3