Bank of America, N.A. v. Saticoy Bay LLC Series 5328 ( 2021 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAR 16 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
BANK OF AMERICA, N.A., No. 20-15582
Plaintiff-counter- D.C. No.
defendant-Appellee, 2:16-cv-00917-RFB-BNW
v.
MEMORANDUM*
LOS PRADOS COMMUNITY
ASSOCIATION; NEVADA
ASSOCIATION SERVICES, INC.,
Defendants,
and
SATICOY BAY LLC SERIES 5328
LOCHMOR,
Defendant-counter-claimant-
Appellant.
Appeal from the United States District Court
for the District of Nevada
Richard F. Boulware II, District Judge, Presiding
Submitted March 12, 2021**
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).
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Before: WALLACE, GOULD, and FRIEDLAND, Circuit Judges.
Appellee Bank of America, N.A. (BANA) brought a quiet title action against
appellant Saticoy Bay LLC Series 5328 Lochmor (Saticoy) in connection with a
property Saticoy had purchased at a foreclosure sale. At summary judgment,
BANA presented evidence that the Federal National Mortgage Association (Fannie
Mae), for which it had acted as a loan servicer, held an enforceable interest in the
property that was not extinguished by the sale. The district court agreed with
BANA. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
In May 2002, two homeowners refinanced their Nevada home by taking out
a loan from the CIT Group/Consumer Finance, Inc. (CIT). The homeowners and
CIT executed a deed of trust that secured the promissory note on the loan. CIT
later assigned its beneficial interest in the deed of trust to Countrywide Home
Loans, Inc. (Countrywide). In September 2002, Fannie Mae bought the loan,
which included the note and the deed of trust. In 2008, Countrywide merged into
BANA, which began servicing the loan for Fannie Mae. Also in 2008, the Federal
Housing Finance Authority (FHFA) placed Fannie Mae into conservatorship,
thereby succeeding to all of Fannie Mae’s rights in its assets. 12 U.S.C.
§ 4617(b)(2)(A). FHFA assets are protected by a statute known as the Federal
Foreclosure Bar, which provides that “[n]o property of the [FHFA] shall be subject
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to levy, attachment, garnishment, foreclosure, or sale without the consent of the
[FHFA].” Id. § 4617(j)(3).
Years later, the homeowners fell behind on their assessment payments to
their homeowners’ association (the HOA). The HOA placed a lien on their home.
Under Nevada law as it was in effect in 2013, the portion of an HOA lien on a
property that consisted of the past nine months of unpaid monthly assessments had
superpriority status over all other liens, including the first deed of trust. Nev. Rev.
Stat. § 116.3116. Accordingly, the HOA and its agent, Nevada Association
Services, Inc. (NAS) foreclosed on the home. Saticoy purchased the property at
the foreclosure sale on March 8, 2013.
BANA sued the HOA, NAS, and Saticoy for quiet title and declaratory
judgment, arguing that Fannie Mae’s interest in the property was not extinguished
by the foreclosure sale because FHFA’s consent had not been obtained. Saticoy
counterclaimed for quiet title. The district court ruled for BANA, holding that
Fannie Mae had proved that it owned the loan in March 2013 and that § 4617(j)(3)
preempts Nevada’s HOA lien superpriority scheme.
Saticoy makes numerous assertions on appeal, none of which has merit.
As an initial matter, and contrary to Saticoy’s contentions, BANA’s claim is
timely. The six-year statute of limitations prescribed in § 4617(b)(12)(A) applies
to quiet title claims that invoke the Federal Foreclosure Bar, including those
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brought by servicers. M & T Bank v. SFR Invs. Pool 1, LLC, 963 F.3d 854, 858
(9th Cir. 2020); see also JPMorgan Chase Bank, N.A. v. SFR Invs. Pool 1, LLC,
475 P.3d 52, 55-56 (Nev. 2020). Although it was only in its amended complaint
that BANA raised the Federal Foreclosure Bar as support for its claim, that
pleading relates back to the original complaint, which itself was timely filed within
six years of the foreclosure sale. See Fed. R. Civ. P. 15(c) (providing for relation
back of a claim “that arose out of the conduct, transaction, or occurrence set
out . . . in the original pleading”); ASARCO, LLC v. Union Pac. R. Co., 765 F.3d
999, 1004 (9th Cir. 2014).
Turning to the merits, it is well settled that the Federal Foreclosure Bar
preempts Nevada’s HOA lien superpriority scheme. Berezovsky v. Moniz, 869
F.3d 923, 930-31 (9th Cir. 2017); see also JPMorgan Chase, 475 P.3d at 54 (citing
Saticoy Bay LLC Series 9641 Christine View v. Fed. Nat’l Mortg. Ass’n (Christine
View), 417 P.3d 363, 366-68 (Nev. 2018)). Because FHFA never consented to the
foreclosure sale, Fannie Mae retains an interest in the property to which Saticoy’s
interest is subject. Saticoy’s arguments to the contrary are unavailing.
Saticoy contends that because there was no “signed writing” indicating
Fannie Mae’s interest, that interest is unenforceable under the statute of frauds and
Nevada’s recording statute. Because Saticoy was not a party to the deed of trust
nor a successor in interest to a party, it does not have standing to assert the statute
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of frauds. Harmon v. Tanner Motor Tours of Nev., Ltd., 377 P.2d 622, 628 (Nev.
1963). And Nevada law allows an entity’s servicer rather than the entity to be
listed as the record beneficiary in a deed of trust. Berezovsky, 869 F.3d at 932;
Daisy Tr. v. Wells Fargo Bank, N.A., 445 P.3d 846, 847 (Nev. 2019) (“First, we
consider whether Freddie Mac must be identified as the beneficiary on the publicly
recorded deed of trust to establish its ownership interest in the subject loan. We
hold that Nevada’s recording statutes impose no such requirement.”). Fannie
Mae’s omission from the deed of trust thus poses no bar to preemption.
Saticoy further argues that the evidence BANA produced at summary
judgment was insufficient to prove Fannie Mae owned the loan at the time of sale.
But we have held that the exact evidence BANA produced—printouts from Fannie
Mae’s database showing that it owned the loan in March 2013; a Fannie Mae
employee declaration affirming BANA’s status as Fannie Mae’s servicer and
attesting to the accuracy of the printouts; and excerpts from Fannie Mae’s servicer
guide detailing its legal relationship with its servicers—is sufficient to prove an
entity’s ownership of a loan. Berezovsky, 869 F.3d at 932-33; accord Daisy Tr.,
445 P.3d at 850.
Finally, Saticoy argues that FHFA’s consent should be implied because it
did not affirmatively refuse to consent, nor were there procedures for requesting
FHFA’s consent at the time of the sale. This argument is squarely foreclosed by
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precedent, see Berezovsky, 869 F.3d at 929 (holding that “[t]he Federal Foreclosure
Bar does not require [FHFA] to actively resist foreclosure”), as Saticoy should
have known from its previous litigation, see Christine View, 417 P.3d at 368
(citing Berezovsky to reject this very argument that had been asserted by Saticoy).
AFFIRMED.
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