Tae-Si Kim v. Adam Kearney

FILED
NOT FOR PUBLICATION NOV 26 2013
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
TAE-SI KIM; et al., No. 12-15959
Plaintiffs - Appellants, D.C. No. 2:09-cv-02008-PMP-
GWF
v.
ADAM B. KEARNEY; et al., MEMORANDUM*
CHARLES M. DAMUS, Esq.; et al.,
Defendants,
And
CUMORAH CREDIT UNION, a Nevada
non-profit corporation,
Defendant - Appellee.
Appeal from the United States District Court
for the District of Nevada
Philip M. Pro, Senior District Judge, Presiding
Submitted November 8, 2013**
San Francisco, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: FARRIS, BLACK***, and IKUTA, Circuit Judges.
Tae-Si Kim & Jin-Sung Hong appeal from the district court’s grant of
summary judgment in favor of Cumorah Credit Union in Kim & Hong’s action
alleging quiet title and slander of title claims that stem from Cumorah’s foreclosure
of a piece of property. We have jurisdiction under 28 U.S.C. § 1291.
We affirm the district court’s decision that Kim & Hong’s quiet title claim
was untimely. It was not filed within the statutorily specified 90 day window.
Under Nevada law, a foreclosure sale “vests in the purchaser the title of the grantor
and any successors in interest without equity or right of redemption.” Nev. Rev.
Stat. § 107.080(5). In order to set aside a foreclosure sale, plaintiffs must
commence an action within 90 days of the date of the sale. Nev. Rev. Stat. Ann. §
107.080 (5)
The foreclosure sale occurred on April 13, 2009. Kim & Hong filed a
complaint on October 15, 2009, after expiration of the required 90 day window.
They argue that N.R.S. § 107.080 only covers quiet title claims by the actual debtor
and does not include quiet title claims by a non-debtor/mortgagee. The statute
***
The Honorable Susan H. Black, Senior Circuit Judge for the U.S.
Court of Appeals for the Eleventh Circuit, sitting by designation.
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states, however, that a foreclosure sale “vests in the purchaser the title of the
grantor and any successors in interest without equity or right of redemption.”
N.R.S. § 107.080(5). Thus, the statutory text does not support this distinction.
Nevada courts have interpreted this language to hold that a foreclosure sale
terminates all other legal and equitable interests in the land. Charmicor, Inc. v.
Bradshaw Fin. Co., 92 Nev. 310, 313, 550 P.2d 413 (Nev. 1976) (legal interest);
McCall v. Carlson, 63 Nev. 390, 406-07, 172 P.2d 171 (Nev. 1946) (equitable
interest). Plaintiffs failed to file their claim within the required 90 day period as
necessary to preserve their interest.
We affirm the district court’s decision that Kim & Hong’s slander of title
claim fails. They were not good faith purchasers of the foreclosed property. Under
Nevada law, a slander of title claim requires that a plaintiff “establish that the
words spoken were false, that they were maliciously spoken, and that the plaintiff
sustained some special pecuniary damages as a direct and natural result of their
having been spoken.” Summa Corp. v. Greenspun, 96 Nev. 247, 254, 607 P.2d
569, 573 (Nev. 1980). Kim & Hong argue that their status as good faith purchasers
means that various statements made by Cumorah during the foreclosure were
falsehoods.
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They, however, were not good faith purchasers. They had actual notice of
Cumorah’s interest in the land. Under Nevada law, a subsequent purchaser of a
property is not a purchaser in good faith if he or she has either actual or
constructive notice “of an interest in the land superior to that which he is
purchasing” and is “not entitled to the protection of the recording act.” Allison
Steel Mfg. Co. v. Bentonite, Inc., 86 Nev. 494, 499, 471 P.2d 666, 669 (Nev. 1970).
Actual notice is determined based on the knowledge of the proposed bona fide
purchaser prior to actual payment. Moore v. De Bernardi, 47 Nev. 33, 220 P. 544,
547 (Nev. 1923). Kim & Hong had actual notice of Cumorah’s instrument prior to
their exercise of the purchase option as evidenced by the FATCO documentation
and their questioning of Kearney about the status of the loan. Cumorah’s
statements made during the foreclosure process were not falsehoods since Kim &
Hong were not purchasers in good faith.
Kim & Hong also argue that Cumorah’s failure to respond to the first
amended complaint constituted an admission of all of the allegations contained in
that complaint. This argument was not raised before the district court and is
therefore waived. Romain v. Shear, 799 F.2d 1416, 1419 (9th Cir. 1986).
AFFIRMED.
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