Nationstar Mortgage, LLC v. Equity Trust Company Custodian ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 16 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
NATIONSTAR MORTGAGE, LLC, No. 19-17167
Plaintiff-counter- D.C. No. 2:15-cv-01744-JAD-EJY
defendant-Appellant,
v. MEMORANDUM*
EQUITY TRUST COMPANY
CUSTODIAN FBO Z130255; ASHWIN
PATEL,
Defendants-counter-claim-
3rd-party-plaintiffs-
Appellees,
v.
FRANK ORNELAS; VIRGILIA MUNOZ,
Third-party-defendants.
Appeal from the United States District Court
for the District of Nevada
Jennifer A. Dorsey, District Judge, Presiding
Submitted December 11, 2020**
San Francisco, 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: TASHIMA, TALLMAN, and MURGUIA, Circuit Judges.
Plaintiff Nationstar Mortgage, LLC (“Nationstar”) appeals from the
summary judgment quieting title to a condominium unit in Nevada in favor of
Defendants Equity Trust Company Custodian FBO Z130255 and Ashwin Patel.
Specifically, Nationstar appeals 1) the district court’s ruling that the subject non-
judicial foreclosure sale should not be set aside because Nationstar presented no
evidence of fraud, unfairness, or oppression that impacted the sale; and 2) the
district court’s rejection of Nationstar’s due process challenge to Nev. Rev. Stat.
§ 116.3116. We review de novo, CitiMortgage, Inc. v. Corte Madera
Homeowners Ass’n, 962 F.3d 1103, 1106 (9th Cir. 2020), and we affirm.
1. Nationstar argues that the district court erred in concluding that there was
no evidence of fraud, oppression, or unfairness that justified setting aside the
foreclosure sale. Under Nevada law, an inadequate price alone is insufficient to set
aside a sale. See Nationstar Mortg., LLC v. Saticoy Bay LLC Series 2227 Shadow
Canyon, 405 P.3d 641, 648–49 (Nev. 2017). There must be “proof of some
element of fraud, unfairness, or oppression as accounts for and brings about the
inadequacy of price.” Id. at 643 (quoting Shadow Wood Homeowners Ass’n v.
N.Y. Cmty. Bancorp., 366 P.3d 1105, 1111 (Nev. 2016) (en banc)). Here, the
district court did not err by ruling that Nationstar failed to raise a material issue of
fact as to whether any fraud, unfairness, or oppression occurred, or that any such
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alleged behavior impacted the sale.
2. The district court also correctly rejected Plaintiff’s due-process
challenge to Nevada’s pre-2015 foreclosure-notice scheme. The Nevada Supreme
Court has clarified that the statutory scheme requires a mandatory notice of default
and notice of sale to all holders of subordinate interests to a homeowners
association’s superpriority lien. See SFR Invs. Pool 1, LLC v. Bank of N.Y. Mellon,
422 P.3d 1248, 1252–53 (Nev. 2018) (en banc). Such notice adequately informs
holders of subordinate interests that a foreclosure sale is imminent and provides
them an opportunity to protect their interest in the property, which is all that due
process demands in this context. See Wells Fargo Bank, N.A. v. Mahogany
Meadows Ave. Tr., 979 F.3d 1209, 1217–18 (9th Cir. 2020). Contrary to
Nationstar’s argument, the notice provided need not specify the superpriority
portion of a homeowners association’s lien, and it need not notify lien holders of
any specific risk to their deeds of trust. See Bank of Am., N.A. v. Arlington W.
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 or
provide particularized notice of risk); see also Mahogany Meadows Ave. Tr., 979
F.3d at 1217–18.
AFFIRMED.
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