Court Opinion

ID: 4520751
Source: CourtListenerOpinion
Date Created: 2020-03-30 20:00:21.438487+00
Date Added: 2024-06-11T09:24:56.953265
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       MAR 30 2020
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

NATIONSTAR MORTGAGE LLC,                        No.    18-16295

                Plaintiff-Appellant,            D.C. No.
                                                2:15-cv-01702-JCM-CWH
 v.

SFR INVESTMENTS POOL 1, LLC;                    MEMORANDUM*
SUNCREST HOMEOWNERS
ASSOCIATION,

                Defendants-Appellees.

                   Appeal from the United States District Court
                            for the District of Nevada
                    James C. Mahan, District Judge, Presiding

                            Submitted March 27, 2020**
                               Las Vegas, Nevada

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

      Nationstar Mortgage LLC appeals from the district court’s order resolving

the parties’ cross-motions for summary judgment. We affirm.

      1. The pre-2015 version of Nevada Revised Statutes § 116.3116 et seq.

      *
             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).
                                                                           Page 2 of 4

establishes a constitutionally sufficient notice scheme. The Nevada Supreme Court

has clarified that the statute requires a mandatory notice of default and notice of

sale to all holders of subordinate interests to a homeowners association’s

superpriority lien. SFR Investments Pool 1, LLC v. Bank of New York Mellon, 422

P.3d 1248, 1252–53 (Nev. 2018) (en banc). Such notice adequately apprises

holders of subordinate interests that a foreclosure sale is imminent and affords

them an opportunity to protect their interest in the property, which is all that due

process demands in this context. Contrary to Nationstar’s argument, the notice

provided need not specify the superpriority portion of a homeowners association’s

lien. See Bank of America, N.A. v. Arlington West Twilight Homeowners Ass’n,

920 F.3d 620, 622, 624 (9th Cir. 2019) (per curiam) (upholding the statute’s facial

constitutionality notwithstanding the fact that the deed of trust holder did not

receive notice of the superpriority portion of the lien).

      Nationstar’s as-applied challenge to the adequacy of the notice provided by

the homeowners association fails for the same reason. Nationstar’s predecessor

was not entitled, as a matter of due process, to notice specifying the amount of the

superpriority portion of the lien. It was instead entitled to notice specifying the

total amount owed to the homeowners association, and it received such notice.

Based on the notice afforded, Nationstar’s predecessor could have requested more

information from the homeowners association in order to tender the amount of the
                                                                             Page 3 of 4

superpriority portion of the lien, or it could have tendered the full amount of the

lien and requested a refund of the non-superpriority portion. See id. at 623; SFR

Investments Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408, 418 (Nev. 2014) (en

banc).

         2. The district court correctly declined to set aside the foreclosure sale on

equitable grounds. Under Nevada law, a foreclosure sale may not be set aside on

equitable grounds merely because the sale price was substantially below the

property’s fair market value; the party challenging the sale must also demonstrate

that the foreclosure sale was affected by some measure of fraud, unfairness, or

oppression. Shadow Wood Homeowners Ass’n, Inc. v. New York Cmty. Bancorp,

Inc., 366 P.3d 1105, 1111 (Nev. 2016) (en banc). Nationstar contends that the

foreclosure sale was rendered unfair because the homeowners association’s

covenants, conditions, and restrictions (CC&Rs) stated that the sale would not

extinguish a first deed of trust, thereby publicizing to prospective buyers that the

property was less valuable than it was. But the Nevada Supreme Court has held

that such provisions conflict with the superpriority lien statute and are therefore

invalid. See SFR Investments, 334 P.3d at 419. Nothing in the record suggests that

any prospective buyer was misled by the invalid CC&R provision. The legal

inaccuracy of the CC&R provision, standing alone, is not a sufficient basis to find

that prospective buyers were misled such that the foreclosure sale was unfair.
            Page 4 of 4

AFFIRMED.