LAW.coLAW.co

BANK OF AMERICA v. Bernini Dr Trust, Defendant-counter-claimant-Appellant. (2021)

United States Court of Appeals, Ninth Circuit.2021-03-16No. No. 20-15584

Summary

Holding. The court affirmed the district court's summary judgment in favor of Bank of America, holding that the bank's deed of trust interest survived the foreclosure sale because tender was excused as a matter of law.

Bank of America sought to confirm that its deed of trust on a property survived a foreclosure sale conducted by a homeowners association. Bernini Drive Trust, who purchased the property at that sale, filed a counterclaim arguing the sale eliminated the bank's interest. The lower court ruled in the bank's favor, and this appeal followed.

The appellate court affirmed, holding that the bank's action was not barred by any statute of limitations and that the bank was excused from tendering the superpriority lien amount because the foreclosure agent had a documented practice of rejecting such tender from the bank's counsel. Since the bank's obligation to tender was excused, its interest in the property was preserved by operation of law despite the foreclosure sale. Consequently, Bernini purchased the property subject to the bank's deed of trust.

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

Key issues

  • Whether a quiet title action was barred by the three-year statute of limitations
  • Whether the foreclosure agent's known policy of rejecting tender excused the bank's obligation to tender
  • Whether a purchaser at foreclosure sale acquires property free of a senior lienholder's interest when tender is excused

Procedural posture

Bernini Drive Trust appealed from summary judgment entered in favor of Bank of America in a quiet title dispute following a homeowners association foreclosure sale.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

MEMORANDUM **

Appellant Bernini Drive Trust (Bernini) appeals from the summary judgment in favor of appellee Bank of America, N.A. (BANA) in a quiet title dispute following a Nevada foreclosure sale. Defendant Southern Highlands Community Association (Southern Highlands), a homeowners association, conducted the foreclosure sale through its foreclosure agent, defendant Alessi & Koenig, LLC (Alessi) pursuant to Nevada Revised Statutes § 116.3116 (2012). BANA commenced an action to determine whether its deed of trust survived the sale, and Bernini, the buyer, filed a quiet title counterclaim, contending that the sale extinguished BANAs interest in the property. On cross-motions for summary judgment, the district court ruled for BANA. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

First, we hold that BANAs quiet title action was not time-barred. For the reasons recently articulated by the Nevada Supreme Court in U.S. Bank Trust, N.A. v. SFR Investments Pool 1, LLC (LSF8 Master Participation Trust), 461 P.3d 159 (Nev. 2020) (unpublished), we reject Berninis argument that the three-year statute of limitations in Nevada Revised Statutes § 11.190(3)(a) applies.

1

Second, we agree with the district court that tender was excused as a matter of law under 7510 Perla Del Mar Ave Trust v. Bank of America, N.A. (Perla), 136 Nev. 62, 458 P.3d 348 (2020) (en banc). Just like in Perla, Alessi had a known policy of rejecting tender of the superpriority lien amount. At Alessis 30(b)(6) deposition, David Alessi testified that during the period in question, the company had a policy of not accepting tender checks for the superpriority lien amount from Miles, Bauer, Bergstorm & Winters (Miles Bauer), BANAs counsel in dozens of foreclosure-related matters, including this one. Rock Jung, a former Miles Bauer attorney, submitted a declaration that similarly described Alessis practice of rejecting tender. Bernini argues on appeal that Alessis policy was to reject only tender offers that came with conditional “restrictive language,” but the conditions Bernini refers to are those limiting the offer to the superpriority amount, which is an appropriate limitation under Nevada law. See Bank of Am., N.A. v. SFR Invs. Pool 1, LLC (Diamond Spur), 134 Nev. 604, 427 P.3d 113, 118 (2018) (en banc) (“Although Bank of Americas tender included a condition, it had a right to insist on the condition.”). Accordingly, BANAs interest in the property was preserved and Bernini purchased the property subject to the deed of trust. Perla, 458 P.3d at 352.

2

Lastly, because we hold that BANAs interest in the property was preserved by operation of law, we need not reach Berninis arguments that it was a bona fide purchaser or that BANA is not entitled to equitable relief. Cf. Diamond Spur, 427 P.3d at 121 (“A partys status as a [bona fide purchaser] is irrelevant when a defect in the foreclosure proceeding renders the sale void.”); Perla, 458 P.3d at 350 n.1 (“Because we conclude that the Banks obligation to tender was excused, we do not address the Banks alternative argument that the sale should be set aside on equitable grounds.”).

AFFIRMED.

FOOTNOTES

1

.   Although it is unpublished, we consider this decision to be highly persuasive. See U.S. Bank, N.A. v. White Horse Ests. Homeowners Assn, 987 F.3d 858,870 n.2 (9th Cir. 2021). We do not resolve what limitations period, if any, does apply. Cf. LSF8 Master Participation Tr., 461 P.3d 159, 2020 WL 1903156, at *1 n.2.

2

.   We need not address Berninis argument that a factual question exists as to whether Alessi received the letter from Miles Bauer. Proving that Alessi received the letter is not required for BANA to meet its burden of establishing Alessis known policy of rejecting tender.