Court Opinion

ID: 4521153
Source: CourtListenerOpinion
Date Created: 2020-03-31 20:00:31.754563+00
Date Added: 2024-06-11T12:03:46.685070
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                              MAR 31 2020
                    UNITED STATES COURT OF APPEALS                         MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

PROF-2013-S3 LEGAL TITLE TRUST                   No.   18-17048
V, By U.S. Bank National Association as
Legal Title Trustee,                             D.C. No.
                                                 2:17-cv-01933-JCM-GWF
              Plaintiff-Appellant,

 v.                                              MEMORANDUM*

FLYING FROG AVENUE TRUST;
VENEZIA COMMUNITY
ASSOCIATION; RED ROCK
FINANCIAL SERVICES, LLC,

              Defendants-Appellees.

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

                            Submitted March 27, 2020**
                               Las Vegas, Nevada

Before: W. FLETCHER, BYBEE, and WATFORD, Circuit Judges.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      This case arises out of a homeowners’ association (HOA) non-judicial

foreclosure sale in Las Vegas, Nevada. The plaintiff, Prof-2013-S3 Legal Title

Trust V by U.S. Bank National Association as Legal Title Trustee (U.S. Bank),

seeks to determine the effect of the 2013 non-judicial foreclosure sale of a home on

which it claims a deed of trust. U.S. Bank, as legal title trustee, sued the

foreclosure-sale purchaser, Flying Frog Avenue Trust, for a declaration that the

HOA sale did not extinguish its deed of trust. U.S. Bank and Flying Frog cross-

moved for summary judgment. The district court denied U.S. Bank’s motion and

granted Flying Frog’s because (1) the amount tendered was insufficient to

discharge the lien, (2) Nevada’s HOA foreclosure scheme was constitutional, and

(3) the sale was commercially reasonable. We reverse.

      The district court erred in rejecting U.S. Bank’s argument that its

predecessor’s tender of more than nine months’ unpaid HOA assessments satisfied

the superpriority portion of the HOA’s lien on the property and preserved U.S.

Bank’s predecessor’s first security interest. Under Nevada law—decided after the

district court’s order in this case—the amount necessary to discharge an HOA’s

superpriority lien is nine months’ unpaid assessments and any maintenance and

nuisance abatement amounts. Bank of Am., N.A. v. SFR Invs. Pool 1, LLC, 427
P.3d 113, 117–18 (Nev. 2018) (“Diamond Spur”) (en banc). U.S. Bank’s

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predecessor tendered the necessary amount here. The valid tender discharged the

superpriority amount of the HOA’s lien. Id.

      Flying Frog’s various arguments against this conclusion fail. First, Flying

Frog cites no authority to support its contention that certain sections of the

Restatement (Third) of Property: Mortgages supersede the clear statement of law

from the Nevada Supreme Court. The remainder of Flying Frog’s arguments have

been expressly rejected by the Nevada Supreme Court and this court. See Bank of

Am., N.A. v. Arlington W. Twilight Homeowners Ass’n, 920 F.3d 620, 623 (9th Cir.

2019) (per curiam); Diamond Spur, 427 P.3d at 118–21.

      U.S. Bank’s predecessor’s tender of the superpriority portion of the HOA

lien discharged that portion of the lien and preserved the first security interest.

This holding fully resolves this appeal and provides U.S. Bank all the relief it

seeks. We therefore need not address the remainder of U.S. Bank’s claims.

      REVERSED.

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