U.S. Bank, N.A. v. Sfr Investments Pool 1, LLC ( 2023 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JAN 24 2023
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
U.S. BANK, N.A., Successor Trustee to No. 19-16853
Wachovia Bank, National Association, as
Trustee for the Holders of BANC of America D.C. No.
Funding Corporation 2004-B Trust, 2:16-cv-00899-GMN-BNW
Plaintiff-Appellee,
MEMORANDUM*
v.
SFR INVESTMENTS POOL 1, LLC,
Defendant-Appellant,
and
SUNRIDGE HEIGHTS HOMEOWNERS
ASSOCIATION; NEVADA
ASSOCIATION SERVICES, INC.,
Defendants.
Appeal from the United States District Court
for the District of Nevada
Gloria M. Navarro, District Judge, Presiding
Submitted January 11, 2023**
Pasadena, California
*
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).
Before: CALLAHAN, R. NELSON, and H.A. THOMAS, Circuit Judges.
SFR Investments Pool 1, LLC (SFR), appeals from the district court’s grant
of summary judgment for U.S. Bank, N.A. (U.S. Bank) in a quiet title and
declaratory relief action involving residential property located in Henderson,
Nevada. We have jurisdiction under 28 U.S.C. § 1291, review de novo,
Berezovsky v. Moniz, 869 F.3d 923, 927 (9th Cir. 2017), and affirm.
This case arises from a foreclosure sale to satisfy a homeowners association
(HOA) “superpriority lien” on the property. Nevada law provides that if a
homeowner fails to pay a certain portion of HOA dues, the HOA is authorized to
foreclose on a “superpriority lien” in that amount, extinguishing other liens and
encumbrances on the delinquent property, including a previously recorded first
deed of trust. See Nev. Rev. Stat. § 116.3116. However, a lender holding a first
deed of trust may avoid extinguishment of its lien by tendering payment on the
“superpriority” portion of the unpaid HOA dues. See Bank of Am., N.A. v.
Arlington W. Twilight Homeowners Ass’n, 920 F.3d 620, 622–23 (9th Cir. 2019);
see also Bank of Am., N.A. v. SFR Invs. Pool 1, LLC, 427 P.3d 113, 116–17 (Nev.
2018) (en banc) (Diamond Spur).
SFR asserts that the only issue in this appeal is whether U.S. Bank’s
complaint was timely filed. In U.S. Bank, N.A. v. Thunder Properties, Inc., 503
P.3d 299 (Nev. 2022), the Nevada Supreme Court held that the Nevada four-year
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catch-all statute of limitations applied to quiet title actions. Id. at 302. As the
foreclosure sale took place in January 2013, and U.S. Bank filed its action in April
2016, the action was timely filed under Thunder Properties.
SFR, however, argues that Thunder Properties “did not definitively
determine when the limitations period begins to run,” and that the statute was
triggered on November 5, 2011, the date U.S. Bank’s tender was rejected.
SFR’s argument is not a reasonable reading of Thunder Properties. There,
the Nevada Supreme Court held that “the statute of limitations should not run
against a lienholder until it has something closely analogous to ‘notice of disturbed
possession,’ such as repudiation of the lien” and that “[t]he HOA foreclosure sale,
standing alone, is not sufficient to trigger the period.” 503 P.3d at 306. It further
stated:
Thus, an HOA foreclosure sale—standing alone—does not
sufficiently call the bank’s deed of trust into question to trigger the
statute of limitations. It is more akin to “notice of an adverse claim”
than “notice of disturbed possession” or “someone press[ing] an
adverse claim.” To rise to the level that would trigger the limitations
period, something more is required.
Id. at 307. It is nonsensical to argue that the statute of limitations for an action
challenging a nonjudicial foreclosure that allegedly severed a deed of trust from
the real property commences before the foreclosure sale. The district court’s
judgment in favor of U.S. Bank is AFFIRMED.
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