Court Opinion

ID: 4691904
Source: CourtListenerOpinion
Date Created: 2021-06-01 20:02:56.437147+00
Date Added: 2024-06-11T08:05:12.683804
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        JUN 1 2021
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

BANK OF AMERICA, NA, FKA                        No.    19-17445
Countrywide Home Loans Servicing, LP, as
Successor by Merger to BAC Home Loans           D.C. No.
Servicing, LP; FEDERAL NATIONAL                 2:16-cv-01053-RFB-DJA
MORTGAGE ASSOCIATION,

                Plaintiffs-Appellants,          MEMORANDUM*

 v.

SFR INVESTMENTS POOL 1, LLC,

                Defendant-Appellee,

and

MADEIRA CANYON HOMEOWNERS
ASSOCIATION; NEVADA
ASSOCIATION SERVICES, INC.,

                Defendants.

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

                       Argued and Submitted April 13, 2021
                              Pasadena, California

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: PAEZ and VANDYKE, Circuit Judges, and GLEASON,** District Judge.

      Plaintiffs Bank of America, NA (“BANA”) and the Federal National

Mortgage Association (“Fannie Mae”) (collectively, “Fannie Mae”) appeal the

district court’s grant of summary judgment in favor of Defendants SFR

Investments Pool 1, LLC (“SFR”), the Madeira Canyon Homeowners Association

(“HOA”), and the HOA’s agent, the Nevada Association Services, Inc. (“NAS”).

This diversity action arises from the nonjudicial foreclosure sale by the HOA of

real property in Nevada. On appeal, Fannie Mae challenges the district court’s

summary judgment ruling on numerous grounds, but we need only address one to

conclude that the judgment must be reversed.

      We have jurisdiction pursuant to 28 U.S.C. § 1332. Reviewing de novo,

Oswalt v. Resolute Indus., Inc., 642 F.3d 856, 859 (9th Cir. 2011), we agree with

Fannie Mae that the 2010 rescission notice decelerated the demand for full

payment of the loan, rendering NRS 106.240 inapplicable. We therefore reverse

and remand.

      Although there is no precedential Nevada Supreme Court decision on point,

the court recently addressed the effect of a rescission notice on a notice of default

and election to sell secured property under a deed of trust in Glass v. Select

      **
              The Honorable Sharon L. Gleason, United States District Judge for
the District of Alaska, sitting by designation.

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Portfolio Servs., Inc., 466 P.3d 939, 2020 WL 3604042, at *1 (Nev. 2020)

(unpublished), a non-precedential decision. Because the facts in Glass are similar

to the undisputed facts here, we find it persuasive and apply the court’s reasoning

to conclude that the district court erred in entering judgment in favor of

SFR. See Nev. R. App. P. 36(c).

       In Glass, the servicer recorded a notice of default and election to sell under

a deed of trust. Glass, 466 P.3d at 939. There was no “dispute that the Notice of

Default accelerated the loan and made the balance immediately due.” Id. Later,

the servicer recorded a notice of rescission, which the court explained, “effectively

retracted the Notice of Default and restored the parties to the prior status they held

before the Notice of Default was filed.” Id. (citing Holt v. Reg’l Tr. Servs. Corp.,

26 P.3d 602, 606 (Nev. 2011)). As the court noted, the servicer’s rescission notice

“clearly state[d] that it does hereby rescind, cancel and withdraw the Notice of

Default and Election to Sell.” Id. at 939 (internal quotation marks deleted). The

court then concluded that “by explicitly cancelling this Notice of Default, [the

servicer] effectively cancelled the acceleration.” Id. In light of these events, the

court held that NRS 106.240 was inapplicable because the servicer rescinded the

notice of default. Id.

       Similar to the facts in Glass, in the present case, the October 2008 notice of

default and election to sell under the deed of trust declared all sums secured by the

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deed of trust “immediately due and payable” and “elect[ed] to cause the trust

property to be sold to satisfy the obligations secured [by the deed of trust].” The

2010 rescission notice, however, “rescind[ed], cancel[led] and withd[rew] the

Notice of Default and Election to Sell . . . .” As in Glass, the effect of the

rescission notice was not only to cancel the sale, but also to cancel the demand for

full payment of the note. In granting summary judgement for SFR, the district

court noted that the rescission notice did not expressly state that “the acceleration

of the loan has been rescinded” and that it reserved “any rights, remedies, or

privileges secured to the beneficiary [Fannie Mae].” On the basis of these

concerns, the district court concluded “that more is required in order to show that

deceleration of payment was intended.”

       SFR echoes these arguments in its appellate brief. These arguments are not

persuasive after Glass, which neither the district court nor the parties had the

benefit of before the court entered judgment on behalf of SFR. Because the 2010

rescission notice decelerated the demand for full payment, the notice rendered

NRS 106.240 inapplicable, and the district court erred by concluding

otherwise. We therefore reverse the district court’s grant of summary judgment to

SFR.

                                           4
      Because NRS 106.240 is not applicable, we need not address the other issues

raised on appeal by Fannie Mae. We remand to the district court so that it may

address in the first instance any remaining issues raised by the parties.

        REVERSED and REMANDED for further proceedings consistent with

this disposition.

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