Court Opinion

ID: 4521519
Source: CourtListenerOpinion
Date Created: 2020-04-01 20:00:43.515539+00
Date Added: 2024-06-11T12:04:07.797401
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                               APR 1 2020
                    UNITED STATES COURT OF APPEALS                         MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

CARRINGTON MORTGAGE                              No.   18-17100
SERVICES, LLC,
                                                 D.C. No.
              Plaintiff-Appellant,               2:18-cv-00414-APG-VCF

 v.
                                                 MEMORANDUM*
SFR INVESTMENTS POOL 1, LLC,

              Defendant-Appellee.

                    Appeal from the United States District Court
                             for the District of Nevada
                    Andrew P. Gordon, District Judge, Presiding

                            Submitted March 27, 2020**
                               Las Vegas, Nevada

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

      This case involves a constitutional challenge to Nevada’s home owners

association (HOA)-lien statute—Nev. Rev. Stat. § 116.3116. Because the claim is

untimely and rooted in no-longer-controlling precedent, we affirm.

      *
             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).
      The plaintiff-appellant, Carrington Mortgage Services, LLC (Carrington),

was the beneficiary on the deed of trust for the property at issue. After the

homeowner failed to pay assessments to his HOA, the HOA initiated a non-judicial

foreclosure and sold the property to defendant-appellee, SFR Investments Pool 1,

LLC (SFR). The foreclosure sale occurred in September 2012.

      In March 2018, Carrington sought a declaratory judgment that its deed of

trust survived the foreclosure sale. SFR then moved to dismiss the case, asserting

that the action was time-barred. The district court granted SFR’s motion.

      1. Carrington first contends that no statute of limitations applies because it

is seeking declaratory relief, not retrospective relief. It alternatively asserts that the

appropriate statute of limitations for this case is the time period for enforcing a

deed of trust. We review the district court’s determination of the applicable

limitations period de novo. Stanley v. Trs. of Cal. State Univ., 433 F.3d 1129,

1134 (9th Cir. 2006).

      Carrington’s attempt to style its claim as seeking prospective relief fails. It

wants to correct an alleged past wrong—namely, its possible loss of interest in the

property following a foreclosure sale. Regardless of how Carrington labels the

relief sought, it is not requesting a declaration that it can use as a shield against

ongoing and future harm. Thus, cases stating that prospective equitable relief

                                            2
cannot be time-barred are inapplicable here. See, e.g., City of Fernley v. State

Dep’t of Taxation, 366 P.3d 699, 708 (Nev. 2016) (en banc) (“[F]ailure to file a

claim within the statute of limitations period does not render all relief time-barred

because claimants retain the right to prevent future violations of their constitutional

rights.” (emphasis added)).

      Carrington’s assertion that it had until 2048 to file this action fairs no better.

Specifically, Carrington argues the limitations period is the time in which the deed

of trust could be enforced. But the period given in Nevada’s deed-enforcement

statute—Nev. Rev. Stat. § 106.240—is not a statute of limitations. See Bank of

N.Y. Mellon v. Ruddell, 380 F. Supp. 3d 1096, 1100 (D. Nev. 2019). Rather, it

only “creates a conclusive presumption that a lien on real property is extinguished

ten years after the debt becomes due.” Pro-Max Corp. v. Feenstra, 16 P.3d 1074,

1077 (Nev. 2001) (per curiam). Carrington’s claim is therefore untimely under any

statute of limitations that the district court considered.

      2. Carrington asserts that SFR waived its statute-of-limitations defense

because SFR never moved to assert its ownership through, for example, a quiet-

title action. But Nevada law establishes the presumption that an HOA sale is

properly conducted. See Nationstar Mortg., LLC v. Saticoy Bay LLC Series 2227

Shadow Canyon, 405 P.3d 641, 646 (Nev. 2017). Thus, SFR did not need to take

                                            3
any further action to assert its superior claims to the property. The district court,

therefore, properly rejected Carrington’s waiver and estoppel claims.

      3. Even assuming that Carrington’s claim was not time-barred, it would still

fail. Carrington asserts that it never received proper notice of the sale. Its

argument was premised on this Circuit’s decision in Bourne Valley Court Trust v.

Wells Fargo Bank, NA, 832 F.3d 1154, 1160 (9th Cir. 2016). In Bourne Valley, we

concluded that § 116.3116 required notice of a foreclosure sale to the mortgage

lender only if the mortgage lender requested such notice. 832 F.3d at 1159.

However, the Supreme Court of Nevada declined to follow Bourne Valley and

instead held that foreclosure notice must be provided to anyone holding a

subordinate interest. SFR Invs. Pool 1, LLC v. Bank of N.Y. Mellon, 422 P.3d
1248, 1253 (Nev. 2018) (en banc). This Circuit subsequently recognized that

“Bourne Valley no longer controls the analysis” and that § 116.3116 “is not

facially unconstitutional on the basis of an impermissible opt-in notice scheme.”

Bank of Am., N.A. v. Arlington W. Twilight Homeowners Ass’n, 920 F.3d 620, 624

(9th Cir. 2019) (per curiam). Carrington’s argument that § 116.3116 is facially

unconstitutional, therefore, lacks legal foundation. Further, nowhere did

Carrington proffer facts indicating that it was provided with inadequate notice.

      AFFIRMED.

                                           4