II Relying on our decision in Bourne Valley Court Trust v. Wells Fargo Bank, NA , 832 F.3d 1154 (9th Cir. 2016), Bank of America argues that the Nevada HOA lien statute violates the Due Process Clause. In that case, we held that Nev. Rev. Stat. § 116.3116 et seq. is facially unconstitutional because it contains an impermissible opt-in notice scheme.

Motion for Partial Summary JudgmentIn its motion for partial summary judgment, SFR Investments asks this Court to determine that, subsequent to the Ninth Circuit's holding in Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d 1154, 1156 (9th Cir. 2016) that "Nevada Revised Statutes section 116.3116's "opt-in" notice scheme facially violated mortgage lenders' constitutional due process rights, §116.3116's "notice scheme" should be returned to its 1991 version. SFR Investments relies upon what it terms the "Return Doctrine:" that "if a statutory amendment is deemed unconstitutional, then the statute 'returns' to its pre-amendment version."

Defendants argue that Kal-Mor's claims fail as a matter of law because the state's foreclosure scheme is facially unconstitutional as it violates lender's due process rights and because the sale of the said property was commercially unreasonable, thereby preserving defendants' security interest in the said property. The Court will grant summary judgment in favor of the defendants pursuant to the Ninth Circuit's decision in Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016) holding that the "opt-in" notice scheme of Nevada's Statute, NRS 116.3116 et seq, facially violated the Fourteenth Amendment of the U.S Constitution. Finally, the Court denies Kal-Mor's countermotion for summary judgment as moot and as untimely filed.

We acknowledge that the Ninth Circuit has recently held that the Legislature's enactment of NRS 116.3116 et seq. does constitute state action. See Bourne Valley Court Tr. v. Wells Fargo Bank, N.A., 832 F.3d 1154, 1159–60 (9th Cir. 2016). However, for the aforementioned reasons, we decline to follow its holding.

(ECF No. 63 at 2.) Plaintiff argues that the Ninth Circuit Court of Appeals' decision in Bourne Valley Court Tr. v. Wells Fargo Bank, NA, 832 F.3d 1154 (9th Cir. 2016), cert. denied, 137 S. Ct. 2296 (2017), requires this Court to declare that the HOA foreclosure sale did not extinguish Plaintiff's First Deed of Trust because the sale was conducted under an unconstitutional statute. (Id. at 3.)

(ECF No. 37 at 9). CMI further posits that any factual disputes regarding actual notice are irrelevant pursuant to Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016), cert. denied, No. 16-1208, 2017 WL 1300223 (U.S. June 26, 2017) ("Bourne Valley"); see also (ECF No. 30). However, the Ninth Circuit actually held that NRS 116.3116's "opt-in" notice scheme, which required a HOA to alert a mortgage lender that it intended to foreclose only if the lender had affirmatively requested notice, facially violated mortgage lenders' constitutional due process rights; plaintiff's interpretation of that holding is overbroad.

(ECF No. 40). GR Investments and Silverstone argue that the Ninth Circuit's interpretation of NRS 116 in Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016) cert. denied, No. 16-1208, 2017 WL 1300233 (U.S. June 26, 2017) ("Bourne Valley") has been superseded by Nevada Supreme Court rulings, and is thus not binding authority. See Saticoy Bay LLC Series 350 Durango 104 v. Wells Fargo Home Mortgage, a Div. of Wells Fargo Bank, N.A., 388 P.3d 970 (Nev. 2017); Nationstar Mortgage, LLC v. Saticoy Bay LLC Series 2227 Shadow Canyon, 133 P.3d 641 (Nev. 2017) ("Shadow Canyon").

Accordingly, to withstand summary judgment in Saticoy Bay and the HOA's favor, BANA must raise colorable equitable challenges to the foreclosure sale or set forth evidence demonstrating fraud, unfairness, or oppression. In its motion for summary judgment, BANA sets forth the following relevant arguments: (1) BANA offered to pay the superpriority portion of the lien, which adequately preserved the first deed of trust ; (2) the foreclosure sale is invalid because NRS Chapter 116 is facially unconstitutional pursuant to Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016), cert. denied, No. 16-1208, 2017 WL 1300223 (U.S. June 26, 2017) ("Bourne Valley"); and (3) the foreclosure sale was commercially unreasonable. (ECF No. 44).

Accordingly, to withstand summary judgment in BTK and the HOA's favor, BANA must raise colorable equitable challenges to the foreclosure sale or set forth evidence demonstrating fraud, unfairness, or oppression. In its motion for summary judgment, BANA sets forth the following relevant arguments: (1) the foreclosure sale is invalid because NRS Chapter 116 is facially unconstitutional pursuant to Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016), cert. denied, No. 16-1208, 2017 WL 1300223 (U.S. June 26, 2017) ("Bourne Valley"); (2) it offered to pay the superpriority portion of the lien, which adequately preserved the first deed of trust; (3) the foreclosure sale was commercially unreasonable; (4) BTK is not a bona fide purchaser; and (5) SFR Investments should not be applied retroactively. (ECF No. 36).

Accordingly, to withstand summary judgment in SFR's favor, Wells Fargo must raise colorable equitable challenges to the foreclosure sale or set forth evidence demonstrating fraud, unfairness, or oppression. In its motion for summary judgment, Wells Fargo sets forth the following relevant arguments: (1) the foreclosure sale was commercially unreasonable; (2) the foreclosure was void ab initio because the NRS 116.3116 statute was facially unconstitutional pursuant to Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016), cert. denied, No. 16-1208, 2017 WL 1300223 (U.S. June 26, 2017) ("Bourne Valley") and thus actual notice is immaterial; and (3) SFR is not a bona fide purchaser. (ECF Nos. 43, 46).