Court Opinion

ID: 6319954
Source: CourtListenerOpinion
Date Created: 2022-03-03 21:01:00.307576+00
Date Added: 2024-06-11T09:00:46.709328
License: Public Domain

NOT FOR PUBLICATION                          FILED
                    UNITED STATES COURT OF APPEALS                        MAR 3 2022
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                            FOR THE NINTH CIRCUIT

SELENE FINANCE, LP,                             No.    20-15779

      Plaintiff-counter-                        D.C. No.
      defendant-Appellee,                       2:16-cv-00334-RFB-NJK

 v.
                                                MEMORANDUM*
COBBLESTONE MANOR VI
HOMEOWNERS ASSOCIATION; G.J.L.,
INCORPORATED, DBA Pro Forma Lien &
Foreclosure Services,

                Defendants,

and

SFR INVESTMENTS POOL 1, LLC,

      Defendant-counter-claimant-
      cross-claimant-Appellant,

 v.

BANK OF AMERICA, N.A.,

                Cross-claim-defendant.

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

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                           Submitted February 18, 2022**
                             San Francisco, California

Before: McKEOWN and W. FLETCHER, Circuit Judges, and BENNETT,***
District Judge.

      This case is one of two appeals involving a foreclosure dispute between SFR

Investments Pool, LLC (“SFR”), and Bank of America (the “Bank”), both arising

out of the United States District Court for the District of Nevada. Both cases turn on

whether the Bank of America tendered a superpriority lien held by a homeowner’s

association (“HOA”) prior to foreclosure. In U.S. Bank, N.A. v. SFR Investments

Pool 1, LLC (No. 20-17449), we reversed the district court’s grant of summary

judgment in favor of SFR, holding that there was a disputed issue of material fact as

to whether tender was delivered. In this case, as delivery of tender was undisputed,

the district court granted summary judgment in favor of Plaintiff-Appellee Selene

Finance—the Bank’s successor in interest. We have jurisdiction under 18 U.S.C.

§ 1291, and we affirm.

      Nevada statutory law provides each HOA a statutory lien against properties it

governs for unpaid assessments. Nev. Rev. Stat. § 116.3116. This lien includes a

      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      ***
              The Honorable Richard D. Bennett, United States District Judge for
the District of Maryland, sitting by designation.

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superpriority component totaling “nine months of unpaid HOA dues and any unpaid

charges for maintenance and nuisance abatement.” Bank of Am., N.A. v. Arlington

W. Twilight Homeowners Ass’n (“Arlington West”), 920 F.3d 620, 623 (9th Cir.

2019). On foreclosure, the superpriority component extinguishes a first deed of trust.

7510 Perla Del Mar Ave Tr. v. Bank of Am., N.A. (“Perla Del Mar”), 458 P.3d 348,

348 (Nev. 2020) (en banc) (citing SFR Invs. Pool 1, LLC v. U.S. Bank, N.A., 334

P.3d 408, 409 (Nev. 2014) (en banc)). The holder of a deed may preserve its interest

“by tendering the superpriority portion of the HOA’s lien before the foreclosure sale

is held.” Id. (citing Bank of Am., N.A. v. SFR Invs. Pool 1, LLC (“Diamond Spur”),

427 P.3d 113, 116 (Nev. 2018) (en banc)).

      SFR raises three arguments on appeal: (1) that the Bank’s tender offer was

insufficient, as it calculated the superpriority component using the $40.00/month rate

the HOA provided instead of the $50.00/month rate listed on the lien document; (2)

that SFR’s status as a bona fide purchaser for value defeats any excuse of tender;

and (3) that the Bank’s tender offer was impermissibly conditional. These arguments

are unavailing.

      Sufficiency of Tender: SFR’s challenge to the sufficiency of tender has been

waived, as SFR did not suggest that Selene used an improper lien calculation at any

point during the proceedings below. Club One Casino, Inc. v. Bernhardt, 959 F.3d

1142, 1153 (9th Cir. 2020). Even if we exercise our discretion to reach the issue, see

                                          3
In re Am. W. Airlines Inc., 217 F.3d 1161, 1165 (9th Cir. 2000), this argument fails.

This Court and the Supreme Court of Nevada have each allowed a lender to rely on

the HOA’s statements when determining the proper assessment rate for the

superpriority lien. See Arlington West, 920 F.3d at 622–23; Diamond Spur, 427 P.3d

at 117–18. Here, the HOA provided the Bank of America with a July 2013 Statement

of Account listing a $40.00/month assessment rate, with no outstanding maintenance

or nuisance charges. In reliance on this Statement, the Bank tendered nine months’

dues at that rate—a total of $360.00. Accordingly, the Bank’s tender was sufficient

under Nevada law.

      Bona Fide Purchaser Status: In the alternative, SFR claims that its bona fide

purchaser status preserved the superpriority lien, notwithstanding the Bank’s tender.

This argument has already been rejected by the Nevada Supreme Court, which has

held that valid tender voids a foreclosure sale and prevents transfer of title. See

Diamond Spur, 427 P.3d at 121 (“A party’s status as a [bona fide purchaser] is

irrelevant when a defect in the foreclosure proceeding renders the sale void.”). SFR

argues that the Nevada legislature’s 2013 codification of the common law bona fide

purchaser doctrine overrides Diamond Spur. However, Diamond Spur was decided

in 2018, and the Nevada Supreme Court did not limit its holding to sales conducted

prior to the 2013 amendments. Accordingly, SFR’s bona fide purchaser argument

fails as a matter of law.

                                         4
      Conditions: SFR insists that the Bank’s tender letters were impermissibly

conditional. To satisfy tender, an offer “must be unconditional or include only those

‘conditions on which the tendering party has a right to insist,’ such as a request for

satisfaction of judgment or a statement that the acceptance of tender satisfies the

superpriority portion of the lien.” CitiMortgage, Inc. v. Corte Madera Homeowners

Ass’n (“Corte Madera”), 962 F.3d 1103, 1107 (9th Cir. 2020) (quoting Diamond

Spur, 427 P.3d at 117–18). “The only legal conditions which may be attached to a

valid tender are either a receipt for full payment or a surrender of the obligation.”

Diamond Spur, 427 P.3d at 118 (quoting Heath v. L.E. Schwartz & Sons, Inc., 416

S.E. 2d 113, 114 (Ga. Ct. App. 1992)).

      SFR argues that the Bank’s insistence that “nine months of assessments was

payment of the full superpriority amount” is impermissibly conditional, as it fails to

account for any maintenance or nuisance-abatement charges. The Nevada Supreme

Court has held that this language is not conditional in the absence of nuisance or

abatement fees. See, e.g., Diamond Spur, 427 P.3d at 118. SFR argues that this

Court’s holding in Corte Madera compels a different result. However, in Corte

Madera, this Court only held that the Bank’s offer was impermissibly conditional

due to its demand that the HOA present “adequate proof” of the delinquency before

the Bank would pay—not because it failed to offer to pay maintenance and nuisance

fees that did not exist. Id. at 1107–08.

                                           5
AFFIRMED.

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