Court Opinion

ID: 2832834
Source: CourtListenerOpinion
Date Created: 2015-09-01 20:01:09.426801+00
Date Added: 2024-06-11T11:31:47.743749
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS
                                                                           FILED
                            FOR THE NINTH CIRCUIT
                                                                            SEP 01 2015
                                                                        MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS
FREEDOM MORTGAGE                                 No. 14-15559
CORPORATION, a New Jersey
corporation,                                     D.C. No. 2:11-cv-01403-MMD-
                                                 GWF
              Plaintiff - Appellee,

 v.                                              MEMORANDUM*

TRIPLE BRAIDED CORD, LLC, as
Trustee of the HR Trust,

              Defendant - Appellant,

  and

TROVARE HOMEOWNERS
ASSOCIATION, a Nevada corporation
and GERARDO GOMEZ, an individual,

              Defendants.

                    Appeal from the United States District Court
                             for the District of Nevada
                     Miranda M. Du, District Judge, Presiding

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                           Submitted August 10, 2015**
                             San Francisco, California

Before: REINHARDT, TASHIMA, and CALLAHAN, Circuit Judges.

      Appellant Triple Braided Cord, LLC (“Triple Braided Cord”) appeals the

judgment against it in Appellee Freedom Mortgage Corporation’s (“Freedom

Mortgage”) suit to quiet title on a property located at 5521 Hidden Rainbow Street

in North Las Vegas, Nevada. Because the parties are familiar with the facts and

procedural history, we do not restate them except as necessary to explain our

decision. We have jurisdiction under 28 U.S.C. § 1291, and we reverse and

remand for further proceedings.

      The district court granted judgment for Freedom Mortgage based on its

determination that Triple Braided Cord1 was not a bona fide purchaser of the

Hidden Rainbow property because Triple Braided Cord had constructive notice of

Freedom Mortgage’s prior-recorded first deed of trust at the time of the purchase.

The district court also held, in denying Triple Braided Cord’s motion for an

extension of time to file dispositive motions, that a homeowner’s association

          **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      1
       Triple Braided Cord is acting as Trustee of the HR Trust. The Court uses
the term “Triple Braided Cord” to refer to both parties.

                                         2
(“HOA”) foreclosure based on a super-priority lien under Nevada law does not

extinguish a first security deed of trust. However, the Nevada Supreme Court has

since held in SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev.

2014), that an HOA has a true super-priority lien on a property for nine months of

unpaid assessments, and foreclosure on this lien extinguishes all other interests in

that property, included prior-recorded first deeds of trust.2 Accordingly, the district

court’s judgment, to the extent it was based on a contrary interpretation of the

Nevada HOA super-priority statutory scheme, was erroneous. See, e.g., Olympic

Sports Prods., Inc. v. Universal Athletic Sales Co.,760 F.2d 910, 913 (9th Cir.

1985) (federal courts “are bound to follow the decisions of a state’s highest court

in interpreting that state’s law”) (citation omitted).

      We accordingly REVERSE the district court’s judgment and REMAND for

further proceedings. This remand is without prejudice to any constitutional

arguments the parties may make below, which the district court may address in the

first instance. We note that the State of Nevada or the Federal Housing Finance

Agency may wish to intervene in the proceedings below, in light of the possible

constitutional issues that the district court may address on remand.

      2
       Given the change in the law presented by SFR, and the fact that Triple
Braided Cord did present its extinguishment theory below, we do not find that
Triple Braided Cord’s extinguishment argument was waived on appeal.

                                            3
REVERSED AND REMANDED.

                     4