NATIONSTAR MORTGAGE LLC v. SATICOY BAY LLC SERIES 6132 PEGGOTTY (2021)

United States Court of Appeals, Ninth Circuit.2021-04-15No. No. 20-15212

Summary · law.co

Holding. The court affirmed the district court's grant of summary judgment for Nationstar, finding that the predecessor's tender of the superpriority amount prior to the foreclosure sale preserved the deed of trust by extinguishing the HOA's superpriority lien.

Saticoy Bay LLC appealed a district court's grant of summary judgment in favor of Nationstar Mortgage LLC regarding the priority of a deed of trust over a homeowners association lien. The central dispute involved whether Nationstar's predecessor had properly preserved its deed of trust by tendering the superpriority amount of the HOA lien before a foreclosure sale. Nationstar's predecessor had tendered nine months of unpaid HOA assessments totaling $324.00 to the HOA's agent, who rejected the payment.

The appellate court affirmed the district court's decision, holding that the tender satisfied and extinguished the superpriority portion of the HOA lien by operation of law. The court rejected Saticoy Bay's arguments that the tender was ineffective because Saticoy Bay was a bona fide purchaser, because the HOA rejected the tender in good faith, or because equitable considerations should override the legal effect of the tender. Under controlling precedent, none of these factors matter when a timely and complete tender has been made.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a timely tender of a homeowners association's superpriority lien amount preserves a first deed of trust
Whether the purchaser's bona fide status affects the validity of a tender
Whether an HOA's good-faith rejection of a tender defeats the tender's legal effect
Whether equitable considerations override the operation-of-law effect of a proper tender

Procedural posture

Saticoy Bay LLC appealed the district court's order granting summary judgment to Nationstar Mortgage LLC on the question of whether Nationstar's predecessor preserved its deed of trust priority through tender of the HOA superpriority lien amount.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

MEMORANDUM ***

Saticoy Bay LLC Series 6132 Peggotty (“Saticoy Bay”) appeals the district courts order granting summary judgment to Nationstar Mortgage LLC (“Nationstar”) finding that Nationstars predecessor preserved its deed of trust by tendering the superpriority amount prior to the Copperfield Homeowners Associations (“HOA”) foreclosure sale of a residential property. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we review the district courts order granting summary judgment and its interpretation of state law de novo. Tabares v. City of Huntington Beach, 988 F.3d 1119, 1124 (9th Cir. 2021). We affirm.

Nationstar has sufficiently established that prior to the foreclosure sale, its predecessor tendered nine months of unpaid HOA assessments totaling $324.00 to the HOAs agent, who rejected the payment.

Thus, the superpriority portion of the HOAs lien was extinguished and Saticoy Bay took ownership of the property subject to the deed of trust. Bank of Am., N.A. v. Arlington W. Twilight Homeowners Assn, 920 F.3d 620, 623 (9th Cir. 2019) (Arlington West) (Under Nevada law, “the holder of the first deed of trust can establish the superiority of its interest by showing that its tender satisfied the superpriority portion of the HOAs lien.”).

Saticoy Bay does not dispute that Nationstars predecessor tendered the full superpriority amount. Instead, Saticoy Bay pursues several arguments that are squarely foreclosed by binding precedent. For example, Saticoy Bays status as a bona fide purchaser is immaterial. See Diamond Spur, 427 P.3d at 119 (“Tendering the superpriority portion of an HOA lien ․ does not require recording.”). Likewise, Saticoy Bays assertion that the tender was rejected in good faith is irrelevant. Saticoy Bay LLC Series 133 McLaren v. Green Tree Serv. LLC, 478 P.3d 376, 379 (Nev. 2020) (en banc) (“An alleged good-faith basis for rejecting a timely, complete tender is not relevant because ․ the tender itself cures the default ‘by operation of law.’ ”). And Nationstars predecessor was entitled to insist on the condition that acceptance would satisfy the full amount of the superpriority lien without invalidating the tender. Arlington West, 920 F.3d at 623.

Saticoy Bay also provides a lengthy argument for why it should prevail based on the equities, relying heavily on Shadow Wood Homeowners Association, Inc. v. New York Community Bancorp, Inc., 132 Nev. 49, 366 P.3d 1105 (2016). But the Supreme Court of Nevada recently rejected this very argument based on Shadow Wood because tender cures the default “by operation of law” and “without regard to equitable concerns.” Green Tree Serv. LLC, 478 P.3d at 379.

Because we find that the deed of trust was preserved, we do not reach Nationstars due process arguments.

AFFIRMED.

FOOTNOTES

. The tender was made through counsel for Nationstars predecessor to the HOAs agent, Red Rock Financial Services.

. At the time of the tender and prior to a 2015 amendment, the superpriority portion of an HOA lien under NRS 116.3116 included “only charges for maintenance and nuisance abatement, and nine months of unpaid assessments.” Bank of Am., N.A. v. SFR Invests. Pool 1, LLC, 134 Nev. 604, 427 P.3d 113, 117 (2018) (en banc), as amended on denial of rehg (Nov. 13, 2018) (Diamond Spur).