Opinion
No. 77857-COA
07-21-2020
NEVADA SANDCASTLES, LLC, Appellant, v. GREEN TREE SERVICING, LLC, N/K/A DITECH FINANCIAL, LLC, Respondent.
ORDER OF AFFIRMANCE
Nevada Sandcastles, LLC (Sandcastles), appeals from a district court order granting a motion for summary judgment in a quiet title action. Eighth Judicial District Court, Clark County; Tierra Danielle Jones, Judge.
The original owner of the subject property failed to make periodic payments to her homeowners' association (HOA). The HOA recorded a notice of delinquent assessment lien and later a notice of default and election to sell to collect on the past due assessments and other fees pursuant to NRS Chapter 116. Sandcastles purchased the property at the resulting foreclosure sale and filed the underlying action seeking to quiet title against respondent Green Tree Servicing, LLC, n/k/a Ditech Financial, LLC (Ditech), the beneficiary of the first deed of trust on the property. The parties later filed competing motions for summary judgment, and the district court ruled in favor of Ditech, finding that the Federal National Mortgage Association (Fannie Mae) owned the underlying loan such that 12 U.S.C. § 4617(j)(3) (the Federal Foreclosure Bar) prevented the foreclosure sale from extinguishing Ditech's deed of trust. This appeal followed.
This court reviews a district court's order granting summary judgment de novo. Wood v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026, 1029 (2005). Summary judgment is proper if the pleadings and all other evidence on file demonstrate that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Id. When deciding a summary judgment motion, all evidence must be viewed in a light most favorable to the nonmoving party. Id. General allegations and conclusory statements do not create genuine issues of fact. Id. at 731, 121 P.3d at 1030-31.
A review of the record from the underlying proceeding reveals that no genuine issue of material fact exists and that Ditech is entitled to judgment as a matter of law. Id. at 729, 121 P.3d at 1029. We reject Sandcastles' arguments regarding the sufficiency of the evidence Ditech presented to prove Fannie Mae's ownership of the loan (i.e., Fannie Mae's business records and the authorizations in the Fannie Mae Servicing Guide generally applicable to its loan servicers), as the supreme court has held that virtually identical evidence was sufficient to prove such an interest in the absence of contrary evidence. See Daisy Tr. v. Wells Fargo Bank, N.A., 135 Nev. 230, 234-36, 445 P.3d 846, 849-51 (2019) (affirming on similar evidence and concluding that neither the loan servicing agreement nor the original promissory note must be produced for the Federal Foreclosure Bar to apply). To the extent Sandcastles contends that the assignment of the deed of trust from one of Ditech's predecessors to another constituted contrary evidence because it purported to transfer both the deed of trust and the underlying note, Ditech's evidence demonstrated that Fannie Mae nevertheless owned the loan at the time of that assignment. Accordingly, the assignor lacked authority to transfer ownership of the loan, and any language in the assignment purportedly doing so had no effect. See 6A C.J.S. Assignments § 111 (2020) ("An assignee stands in the shoes of the assignor and ordinarily obtains only the rights possessed by the assignor at the time of the assignment, and no more.").
Although Sandcastles is correct that the bank in Daisy Trust produced not only Freddie Mac's business records but also its own records to prove the agency relationship between itself and Freddie Mac, see id. at 232, 445 P.3d at 848, we reject Sandcastles' contentions here that such evidence is necessary to prove Ditech's relationship with Fannie Mae or that its absence somehow undermines Ditech's case. Cf. Berezovsky v. Moniz, 869 F.3d 923, 932-33, 932 n.8 (9th Cir. 2017) (upholding the district court's ruling that Freddie Mac owned the loan on the basis of Freddie Mac's uncontroverted business records).
Sandcastles also contends that a genuine dispute of material fact remains regarding the agency relationship between Ditech and Fannie Mae because they entered into their servicing contract over one year before the underlying loan originated and over nine years before Ditech allegedly began servicing the loan. But because Sandcastles raised this argument for the first time in its reply brief, we need not consider it. See SFR Invs. Pool 1, LLC v. U.S. Bank, N.A., 135 Nev. 346, 352 n.3, 449 P.3d 461, 466 n.3 (2019) (declining to consider arguments made for the first time in a reply brief). And regardless, Sandcastles fails to explain how the date of the servicing contract—which does not identify the subject property and instead appears to be a generic agreement governing the servicing relationship between the two entities—in any way calls into question the extent to which Fannie Mae's own business records accurately depict when Ditech began servicing the loan at issue here. See Edwards v. Emperor's Garden Rest., 122 Nev. 317, 330 n.38, 130 P.3d 1280, 1288 n.38 (2006) (noting that the appellate courts need not consider claims unsupported by cogent argument).
We also reject Sandcastles' argument that Fannie Mae was required to record its interest in order to avail itself of the Federal Foreclosure Bar. See Daisy Tr., 135 Nev. at 233-34, 445 P.3d at 849 (holding that a deed of trust need not be assigned to a regulated entity in order for it to own the secured loan—meaning that Nevada's recording statutes are not implicated—where the deed of trust beneficiary is an agent of the note holder). And because Fannie Mae need not record its interest, Sandcastles' purported status as a bona fide purchaser is inapposite. See id. at 234, 445 P.3d at 849. Moreover, although Sandcastles contends that Ditech was required under the statute of frauds to produce a written instrument evidencing Fannie Mae's acquisition of the loan, Sandcastles was not a party to that transaction and therefore lacks standing to invoke the statute of frauds. See Harmon v. Tanner Motor Tours of Nev., Ltd., 79 Nev. 4, 16, 377 P.2d 622, 628 (1963) ("The defense of the statute of frauds is personal, and available only to the contracting parties or their successors in interest.").
In light of the foregoing, the district court properly concluded that the Federal Foreclosure Bar prevented extinguishment of Ditech's deed of trust and that Sandcastles took the property subject to it. See Saticoy Bay LLC Series 9641 Christine View v. Fed. Nat'l Mortg. Ass'n, 134 Nev. 270, 273-74, 417 P.3d 363, 367-68 (2018) (holding that the Federal Foreclosure Bar preempts NRS 116.3116 such that it prevents extinguishment of the property interests of regulated entities under FHFA conservatorship without affirmative FHFA consent). Thus, we
We further reject Sandcastles' argument that the Federal Foreclosure Bar violates due process, as purchasers at HOA foreclosure sales do not have a constitutionally protected property interest in obtaining a property free and clear of a first deed of trust. See Fed. Home Loan Mortg. Corp. v. SFR Invs. Pool 1, LLC, 893 F.3d 1136, 1148 (9th Cir. 2018) (noting that the Federal Foreclosure Bar "forecloses that purported interest prior to its vestment in [a purchaser]").
ORDER the judgment of the district court AFFIRMED.
Insofar as the parties raise arguments that are not specifically addressed in this order, we have considered the same and conclude that they either do not present a basis for relief or need not be reached given the disposition of this appeal.
/s/_________, C.J.
Gibbons
/s/_________, J.
Tao
/s/_________, J.
Bulla cc: Hon. Tierra Danielle Jones, District Judge
The Wright Law Group
Wolfe & Wyman LLP
Fennemore Craig P.C./Reno
Eighth District Court Clerk