Court Opinion

ID: 2829721
Source: CourtListenerOpinion
Date Created: 2015-08-21 20:00:58.487857+00
Date Added: 2024-06-11T12:21:57.686986
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                             AUG 21 2015
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

DIAKONOS HOLDINGS LLC, Trustee                   No. 13-15470
on behalf of Coventry Green Trust,
                                                 D.C. No. 2:12-cv-00949-KJD-NJK
              Plaintiff - Appellant,

 v.                                              MEMORANDUM*

COUNTRYWIDE HOME LOANS, INC.;
et al.,

              Defendants - Appellees.

                   Appeal from the United States District Court
                             for the District of Nevada
                  Kent J. Dawson, Senior District Judge, Presiding

                           Submitted August 10, 2015**
                             San Francisco, California

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

      Appellant Diakonos Holdings LLC (“Diakonos”) appeals the dismissal of its

suit to quiet title on a property located at 2704 Coventry Green Avenue in

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Henderson, 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.1

      The district court dismissed Diakonos’ suit based on its determination that a

homeowner’s association (“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. Accordingly, the district court’s dismissal, 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).

      1
      Appellees’ unopposed Motion for Judicial Notice filed April 21, 2014 is
GRANTED. The parties’ Joint Motion for an Order Remanding This Case filed
February 12, 2015 is DENIED AS MOOT.

                                           2
      We accordingly REVERSE the district court’s dismissal 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.

      REVERSED AND REMANDED.

                                          3