fhlmc/freddie Mac v. T-Shack, Inc. ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS APR 2 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
FEDERAL HOME LOAN MORTGAGE No. 18-16319
CORPORATION; WELLS FARGO BANK,
N.A., D.C. No.
2:16-cv-02664-JCM-PAL
Plaintiffs-Appellees,
v. MEMORANDUM*
T-SHACK, INC.,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding
Submitted March 30, 2020**
Pasadena, California
Before: MURGUIA and MILLER, Circuit Judges, and STEEH,*** District Judge.
*
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).
***
The Honorable George Caram Steeh III, United States District Judge
for the Eastern District of Michigan, sitting by designation.
T-Shack, Inc., (“T-Shack”) appeals the district court’s grant of summary
judgment in favor of the Federal Home Loan Mortgage Corporation (“Freddie
Mac”) and Wells Fargo Bank, N.A. (“Wells Fargo”). We review the grant of
summary judgment de novo. See Berezovsky v. Moniz, 869 F.3d 923, 927 (9th Cir.
2017). We have jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.
T-Shack purchased real property in Nevada at a homeowner’s association
foreclosure sale in 2013. The property was encumbered by a note and deed of trust
that had been purchased by Freddie Mac in 2005. In 2010, the deed of trust was
assigned to Wells Fargo, as Freddie Mac’s authorized servicer of the loan. At the
time of the sale, Wells Fargo was the record beneficiary of the deed of trust and
Freddie Mac was the owner of the loan.
The Federal Foreclosure Bar prohibits foreclosure of Freddie Mac property
without its consent while it is under conservatorship. Berezovsky, 869 F.3d at 928.
The district court held that, by operation of the Federal Foreclosure Bar, 12 U.S.C.
§ 4617(j)(3), the foreclosure sale did not extinguish Freddie Mac’s interest in the
property. See id. at 927-31. The district court found that Freddie Mac established
its ownership interest in the property and that it did not consent to the sale.
T-Shack’s arguments to the contrary are unavailing.
T-Shack argues that Freddie Mac did not establish its property interest
because the beneficiary of the deed of trust was Wells Fargo, not Freddie Mac.
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This argument is precluded by Berezovsky, in which we found that a note holder
retains its security interest in the property even if the beneficial interest in the deed
of trust is assigned to its loan servicing agent. Id. at 932. Because Wells Fargo
was Freddie Mac’s agent, Freddie Mac retained a valid and enforceable property
interest under Nevada law, even though its name was not recorded on the deed of
trust. Id.; Daisy Trust v. Wells Fargo Bank, N.A., 445 P.3d 846, 849 (Nev. 2019)
(en banc).
T-Shack also asserts that Freddie Mac did not submit evidence that it is the
owner of the loan. To the contrary, Freddie Mac offered sufficient evidence of its
property interest by providing a printout of its database records, an accompanying
declaration, and excerpts of its Single-Family Seller/Servicer Guide, the same
evidence we found to be sufficient in Berezovsky. 869 F.3d at 932-33 & nn.8-9.
T-Shack’s argument that Freddie Mac failed to prove that it did not consent
to the sale is also foreclosed by Berezovsky. Freddie Mac need not prove its lack
of consent; “[r]ather, the statutory language cloaks Agency property with
Congressional protection unless or until the Agency affirmatively relinquishes it.”
Id. at 929. T-Shack points to no evidence showing that Freddie Mac affirmatively
consented to the sale.
T-Shack’s contention that the Federal Foreclosure Bar is unconstitutional
was rejected by Federal Home Loan Mort. Corp. v. SFR Investments Pool 1, LLC,
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893 F.3d 1136, 1150-51 (9th Cir. 2018), cert. denied, 139 S. Ct. 1618 (2019), in
which we held that the Federal Foreclosure Bar does not violate a purchaser’s due
process rights.
To the extent T-Shack claims to be a bona fide purchaser under Nevada law,
its contention is without merit. See Nev. Rev. Stat. §§ 111.180, 111.325.
T-Shack’s argument is based upon the flawed premise that Freddie Mac’s interest
was unrecorded. However, the deed of trust was recorded prior to the sale in the
name of Freddie Mac’s agent, providing T-Shack with notice of Freddie Mac’s
adverse interest in the property. See Huntington v. Mila, Inc., 75 P.3d 354, 356
(Nev. 2003) (“A subsequent purchaser with notice, actual or constructive, of an
interest in property superior to that which he is purchasing is not a purchaser in
good faith, and is not entitled to the protection of the recording act.”) (citing
Allison Steel Mfg. Co. v. Bentonite, Inc., 471 P.2d 666, 669 (Nev. 1970)); see also
Daisy Trust, 445 P.3d at 849 (“Nevada’s recording statutes did not require Freddie
Mac to publicly record its ownership interest as a prerequisite for establishing that
interest. . . . We therefore need not address . . . Daisy Trust’s argument that it is
protected as a bona fide purchaser from the Federal Foreclosure Bar’s effect.”).
Accordingly, T-Shack is not a bona fide purchaser.
Additionally, even if T-Shack was a bona fide purchaser, the Federal
Foreclosure Bar “unequivocally expresses Congress’s ‘clear and manifest’ intent to
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supersede any contrary law, including state law, that would allow foreclosure of
Agency property without its consent.” Berezovsky, 869 F.3d at 930-31. T-Shack’s
alleged status as a bona fide purchaser cannot survive the Federal Foreclosure Bar,
which preempts conflicting state law. See id.
AFFIRMED.
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