Bank of New York Mellon v. Royal Highlands St & Landscape ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS AUG 14 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
BANK OF NEW YORK MELLON, FKA No. 19-16579
Bank of New York, as Successor to
JPMorgan Chase Bank, N.A., Trustee for the D.C. No.
Holders of SAMI II Trust 2006-AR7, 2:16-cv-01993-JCM-BNW
Plaintiff-Counter-
Defendant-Appellant, MEMORANDUM*
v.
ROYAL HIGHLANDS STREET AND
LANDSCAPE MAINTENANCE
CORPORATION,
Defendant-Appellee,
SFR INVESTMENTS POOL 1, LLC,
Defendant-Counter-Claimant-
Appellee,
and
ALESSI & KOENIG LLC,
Defendant.
Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Submitted August 12, 2020**
San Francisco, California
Before: GRABER and BRESS, Circuit Judges, and DAWSON,*** District Judge.
Plaintiff Bank of New York Mellon timely appeals from the entry of final
judgment against Plaintiff and in favor of Defendant and Counterclaimant SFR
Investments Pool 1, LLC ("SFR"). Applying Nevada law, the district court held
that SFR held valid title to the disputed property following a foreclosure sale in
early 2013. The court also dismissed, as moot, all of Plaintiff's remaining claims
against SFR and two other Defendants, Royal Highland Street and Landscape
Maintenance Corporation ("Royal Highland") and Alessi & Koenig, LLC.
Reviewing de novo, CitiMortgage, Inc. v. Corte Madera Homeowners Ass'n, 962
F.3d 1103, 1106 (9th Cir. 2020), we affirm.
1. The district court correctly held that Royal Highland was not a "limited-
purpose association" for purposes of Nevada Revised Statutes section
116.1201(2)(a).1 Among other reasons, Royal Highland's declaration does not
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Robert T. Dawson, United States District Judge for the
Western District of Arkansas, sitting by designation.
1
All citations to the Nevada Revised Statutes and Nevada Administrative Code are
to the version of the code in effect at the time of the foreclosure sale.
2
contain the "express[] prohibit[ions]" required by Nevada Administrative Code
116.090(1)(c).
2. Even assuming that Royal Highland failed to comply with all of the
mailing provisions of Nevada Revised Statutes chapter 116, Plaintiff has neither
disputed that it received timely notice through alternative means nor argued that
any deficient mailing prejudiced Plaintiff. Accordingly, the sale is not statutorily
void. See U.S. Bank, Nat'l Ass'n ND v. Res. Grp., LLC, 444 P.3d 442, 448 (Nev.
2019) (holding that a sale is statutorily void due to deficient mailing only if, among
other things, the holder of the first deed of trust "did not receive timely notice by
alternative means" and "suffered prejudice as a result").
3. The district court correctly held that no equitable basis exists for setting
aside the sale. Even assuming that Royal Highland's conduct constituted
unfairness, Plaintiff has not pointed to any evidence, such as its own reliance on
Royal Highland's conduct, that any unfairness affected the sale. See Res. Grp.,
LLC v. Nev. Ass'n Servs., 437 P.3d 154, 160–61 (Nev. 2019) (en banc) (holding
that "a court may set the sale aside" only "if the totality of the circumstances
demonstrates that the sale itself was affected by 'fraud, unfairness, or oppression'");
Nationstar Mortg., LLC v. Saticoy Bay LLC Series 2227 Shadow Canyon, 405
P.3d 641, 648–49 (Nev. 2017) ("[I]f the district court closely scrutinizes the
circumstances of the sale and finds no evidence that the sale was affected by fraud,
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unfairness, or oppression, then the sale cannot be set aside, regardless of the
inadequacy of price." (emphasis added)); see also Res. Grp. LLC, 437 P.3d at 160
("The party seeking to set aside the sale on equitable grounds bears the burden to
produce evidence showing that the sale was affected by fraud, unfairness, or
oppression that would justify setting aside the sale." (internal quotation marks and
brackets omitted)).
4. The district court correctly rejected Plaintiff's facial due-process
challenge to Nevada's pre-2015 foreclosure-notice scheme. The Nevada Supreme
Court has clarified that the statute requires a mandatory notice of default and notice
of sale to all holders of subordinate interests to a homeowners association’s
superpriority lien. SFR Invs. Pool 1, LLC v. Bank of New York Mellon, 422 P.3d
1248, 1252–53 (Nev. 2018) (en banc). Such notice adequately apprises holders of
subordinate interests that a foreclosure sale is imminent and affords them an
opportunity to protect their interest in the property, which is all that due process
demands in this context. Contrary to Plaintiff'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
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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).
5. We need not, and do not, reach any of the parties' alternative arguments.
AFFIRMED.
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