Selene Finance, Lp v. Sfr Investments Pool 1, LLC ( 2022 )

NOT FOR PUBLICATION FILED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.
2
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
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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.
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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.
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AFFIRMED.
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