Court Opinion

ID: 4660628
Source: CourtListenerOpinion
Date Created: 2021-02-16 21:00:48.808212+00
Date Added: 2024-06-11T08:02:08.070505
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        FEB 16 2021
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

CITIBANK, NA, not in its individual             No.    19-16642
capacity, but solely as trustee of NRZ Pass-
Through Trust VI,                               D.C. No.
                                                2:15-cv-01178-RFB-NJK
      Plaintiff-Counter-
      Defendant-Appellant,
                                                MEMORANDUM*
 v.

RIVERWALK HOMEOWNERS
ASSOCIATION,

                Defendant-Appellee,

JERRY GUTZMER,

      Defendant-Counter-Claimant-
      Appellee.

                   Appeal from the United States District Court
                            for the District of Nevada
                 Richard F. Boulware II, District Judge, Presiding

                     Argued and Submitted October 29, 2020
                               Portland, Oregon

Before: TASHIMA, GRABER, and IKUTA, Circuit Judges.
Dissent by Judge IKUTA

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      Plaintiff Citibank, NA, timely appeals the summary judgment in favor of

Defendants Riverwalk Homeowners Association ("Riverwalk HOA") and Jerry

Gutzmer, in this action concerning a foreclosure sale of real property in Nevada by

Riverwalk HOA. Reviewing de novo, CitiMortgage, Inc. v. Corte Madera

Homeowners Ass’n, 962 F.3d 1103, 1106 (9th Cir. 2020), we affirm.

      1. The district court correctly held that no equitable basis exists for setting

aside the sale. Even assuming that statements in the Covenants, Conditions and

Restrictions ("CC&Rs") document by Riverwalk HOA constituted unfairness,

Citibank has not pointed to any evidence, such as its own reliance on the

statements not to contest the sale, that the statements affected the sale. U.S. Bank,

N.A. v. White Horse Estates Homeowners Ass’n, No. 19-17033 [citation pending]

(9th Cir. 2021).

      2. The district court correctly granted summary judgment to Riverwalk

HOA on Citibank’s claim of a breach of the statutory duty of good faith, Nev. Rev.

Stat. § 116.1113.1 None of the three aspects of the CC&Rs cited by Citibank

supports its claim.

      First, both Nevada law and other provisions in the CC&Rs clearly

superseded the CC&Rs’ mortgage-savings provision. Nev. Rev. Stat. §§ 116.1104,

1
 All citations to the Nevada Revised Statutes are to the version of the code in
effect at the time of the foreclosure sale.

                                          2
116.1206(1); SFR Invs. Pool 1, LLC v. U.S. Bank N.A., 334 P.3d 408, 419 (Nev.

2014) (en banc). Accordingly, that provision gave rise to no duty on the part of

Riverwalk HOA, and Citibank cannot bring a breach of good faith claim. See

Mann St. Tr. v. Elsinore Homeowners Ass’n, 466 P.3d 540 (table), 2020 WL

3470345, at *1 (Nev. 2020) (unpublished) ("Dismissal of appellant’s NRS

116.1113 claim was also appropriate because respondent did not have a duty to

[take a certain action].").

      Second, the CC&Rs’ provision that allowed an action at law to recover

delinquent assessments equally allowed foreclosure; nothing suggests that

Riverwalk HOA acted in bad faith by choosing one of two possible avenues of

recourse.

      Finally, the notice of delinquent installment lien listed all data required by

the CC&Rs, including the total "amount of Assessments and other sums due."

Neither the statute nor the CC&Rs required the lien to itemize the sub-charges,

SFR, 334 P.3d at 418, so Riverwalk HOA did not breach any good-faith obligation.

Moreover, as noted above, Citibank has not provided any evidence that an itemized

list would have caused Citibank to act differently; Citibank’s speculation that an

itemized list "could have been used to calculate the superpriority portion of the

HOA’s lien," and could have facilitated Citibank’s tender of payment does not

suffice to defeat summary judgment.

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      3. The district court correctly rejected Citibank’s facial due-process

challenge to Nevada’s pre-2015 foreclosure-notice scheme. Wells Fargo Bank,

N.A. v. Mahogany Meadows Ave. Tr., 979 F.3d 1209, 1217–18 (9th Cir. 2020);

Bank of Am., N.A. v. Arlington W. Twilight Homeowners Ass’n, 920 F.3d 620,

622, 624 (9th Cir. 2019) (per curiam).

      AFFIRMED.

                                         4
                                                                                FILED
Citibank v. Riverwalk Homeowners Association, et al., 19-16642
                                                                                  FEB 16 2021
IKUTA, Circuit Judge, dissenting:                                           MOLLY C. DWYER, CLERK
                                                                              U.S. COURT OF APPEALS

      Riverwalk Homeowners Association conducted a foreclosure sale where a

buyer paid a mere $11,500 for a home valued at nearly $80,000, just 14 percent of

the home’s value. The foreclosure sale also extinguished Citibank’s first deed of

trust, which secured a loan of some $223,000. Citibank suffered this fate because

it failed to pay the small superpriority portion of Riverwalk’s $2,335 lien. In

erasing Citibank’s lien, Riverwalk contravened the mortgage protection clause in

its Covenants, Conditions, and Restrictions (CC&Rs), which stated that no lien for

assessments would “defeat or render invalid the rights of the Beneficiary under any

Recorded First Deed of Trust.”

      The Nevada Supreme Court has clarified that “where the inadequacy of the

price is great, a court may grant relief based on slight evidence of fraud, unfairness,

or oppression,” and “an HOA’s representation that the foreclosure sale will not

extinguish the first deed of trust” constitutes such evidence. Nationstar Mortg.,

LLC v. Saticoy Bay LLC Series 2227 Shadow Canyon, 133 Nev. 740, 741, 749 & n.

11 (2017) (emphasis added). Based on Shadow Canyon—the only published

decision of the Nevada Supreme Court on this issue—the mortgage protection

clause in the CC&Rs provides a basis for Citibank’s claim.

      As I explained in my dissent in U.S. Bank v. White Horse, 19-17033, – F.3d
–, (9th Cir. 2021) (Ikuta, J., dissenting), the Nevada Supreme Court—not this court

—should resolve any tension between Shadow Canyon and unpublished opinions

of the Nevada Supreme Court indicating, without reasoning, that a mortgage

protection clause alone is not sufficient evidence of fraud, oppression or

unfairness. Therefore, I would certify to the Nevada Supreme Court the question

whether Riverwalk’s misleading CC&Rs constitute slight evidence of fraud,

unfairness, or oppression which provides a basis for setting aside the sale of the

property for 14 percent of its value.

                                          2