The Bank of New York Mellon v. Spring Mountain Ranch Ma ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAR 31 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
THE BANK OF NEW YORK MELLON, No. 18-16342
FKA Bank of New York, as Trustee for the
Certificateholders of the CWALT, Inc., D.C. No.
Alternative Loan Trust 2005-41, Mortgage 2:17-cv-02177-JCM-NJK
Pass-Through Certificates, Series 2005-41,
Plaintiff-Appellant, MEMORANDUM*
v.
SPRING MOUNTAIN RANCH MASTER
ASSOCIATION; 8933 SQUARE KNOT
TRUST,
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.
The Bank of New York Mellon (BNYM) seeks reversal of the district
*
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
court’s order granting the motion for summary judgment filed by
defendant/counter-claimant 8933 Square Knot Trust (the Trust) on the Trust’s
claim for quiet title, and dismissing as moot BNYM’s motion for summary
judgment on its own claim for quiet title. We reverse the district court’s order
granting the Trust’s motion for summary judgment and remand for further
proceedings consistent with this disposition.
1. When the district court ruled, it did not have the benefit of the Nevada
Supreme Court’s decision in Bank of America, N.A. v. SFR Investments Pool 1,
LLC, 427 P.3d 113 (Nev. 2018) (en banc). There, the court held that the holder of
a first deed of trust can preserve its interest by tendering the superpriority portion
due on a homeowners association’s lien, which consists of nine months of unpaid
dues and any unpaid charges for maintenance and nuisance abatement. Id. at 116–
18.
BNYM’s predecessor complied with this requirement by tendering payment
of $535.50 prior to the foreclosure sale. Nine months of unpaid dues totaled
$531.00. Because the ledger provided by the homeowners association did not
reflect any charges for maintenance or nuisance abatement, a tender of $535.50
was sufficient to satisfy the superpriority portion of the lien. See Bank of Am., N.A.
v. Arlington W. Twilight Homeowners Ass’n, 920 F.3d 620, 623 (9th Cir. 2019)
(per curiam); SFR Investments Pool 1, 427 P.3d at 118. Accordingly, the
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foreclosure sale did not extinguish BNYM’s deed of trust. See SFR Investments
Pool 1, 427 P.3d at 116.
2. We affirm the district court’s holding that the Trust’s counterclaim was
timely. The Trust acquired its interest in the property in June 2012 and filed its
counterclaim more than five years later, on October 30, 2017—soon after it first
learned of BNYM’s competing interest in the property. BNYM filed its claim for
quiet title in August 2017. Although Nevada law provides a five-year statute of
limitations for a claim for quiet title, which accrues once the plaintiff or her
predecessor acquires her interest in the property, Saticoy Bay LLC Series 2021
Gray Eagle Way v. JPMorgan Chase Bank, N.A., 388 P.3d 226, 232 (Nev. 2017), a
party cannot reasonably be expected to file a claim for quiet title before she is
aware of a competing interest in the property. Absent any binding authority
suggesting that Nevada law requires a party to file a claim for quiet title before she
has reason to believe that doing so is necessary, we decline to reverse the district
court’s judgment on that basis.
We leave for the district court on remand to address in the first instance the
Trust’s bona fide purchaser argument, which the court did not reach below, and
which the parties have not briefed.
3. BNYM asserted its own claim for quiet title against the Trust and Spring
Mountain Ranch Master Association (Spring Mountain). Spring Mountain filed a
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motion to dismiss BNYM’s claim for quiet title on the ground that the claim was
barred by the statute of limitations. The district court granted that motion, and
thereafter dismissed as moot BNYM’s motion for summary judgment on its claim
for quiet title against the Trust. BNYM has waived any challenge to those rulings
by not presenting arguments against them in its briefs on appeal.
In light of our reversal of the district court’s ruling on the Trust’s motion for
summary judgment on its claim for quiet title, we remand to the district court for
further proceedings consistent with this disposition.
AFFIRMED in part, REVERSED in part, and REMANDED.