Opinion
20-17335 20-17378
11-07-2022
BANK OF NEW YORK MELLON, FKA Bank of New York, Plaintiff-counter- defendant-Appellee, v. 4655 GRACEMONT AVENUE TRUST, Defendant-counter-claimant- Appellant, and BLUE DIAMOND RANCH LANDSCAPE MAINTENANCE ASSOCIATION, Defendant. BANK OF NEW YORK MELLON, FKA Bank of New York, Plaintiff-counter- defendant-Appellant, v. 4655 GRACEMONT AVENUE TRUST, Defendant-counter-claimant- Appellee, and BLUE DIAMOND RANCH LANDSCAPE MAINTENANCE ASSOCIATION, Defendant.
NOT FOR PUBLICATION
Argued and Submitted October 20, 2022 San Francisco, California
Appeal from the United States District Court for the District of Nevada Jennifer A. Dorsey, District Judge, Presiding D.C. No. 2:17-cv-00063-JAD-BNW
BEFORE: GILMAN, CALLAHAN, AND VANDYKE, CIRCUIT JUDGES.
This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.
MEMORANDUM
Defendant 4655 Gracemont Avenue Trust (Gracemont) appeals from the district court's denial of relief on its counterclaim and Plaintiff, Bank of New York Mellon (Mellon), appeals from the district court's finding that its claims were time barred. The appeals are from the district court's final judgment, and we have jurisdiction under 28 U.S.C. § 1291. We affirm in part, vacate in part, and remand for entry of judgment in favor of Mellon.
This case arises from a foreclosure sale to satisfy a homeowners association ("HOA") lien on the property. Nevada law provides that if a homeowner fails to pay a certain portion of HOA dues, the HOA is authorized to foreclose on a "superpriority lien" in that amount, extinguishing other liens and encumbrances on the delinquent property, including a previously recorded first deed of trust. See Nev. Rev. Stat. § 116.3116. However, a lender holding a first deed of trust may avoid extinguishment of its lien by tendering payment on the "superpriority" portion of the unpaid HOA dues. See Bank of Am., N.A. v. Arlington W. Twilight Homeowners Ass 'n, 920 F.3d 620, 622-23 (9th Cir. 2019); see also Bank of Am., N.A. v. SFR Invs. Pool 1, LLC, 427 P.3d 113, 116-17 (Nev. 2018) (en banc).
In September 2006, Megan Ford took out a loan of $291,200 to finance the purchase of a home located at 4655 Gracemont Avenue, Las Vegas. The loan was secured by a deed of trust in favor of Mortgage Electronic Registration Systems, Inc., and in July 2011, an assignment of the deed of trust was recorded transferring the beneficial assignment to Mellon. After Ford fell behind on her HOA payments, Absolute Collection Service, LLC ("ACS") initiated foreclosure proceedings. Mellon retained the law firm Miles Bauer Bergrom &Winters, which sought to pay off the superpriority component of the HOA lien. ACS rebuffed Miles Bauer's efforts and proceeded to foreclose on the home on June 13, 2012, selling the property for $6,100. Mellon initiated this action on January 16, 2017.
1. Gracemont raises a single claim on appeal: that the district court erred in granting judgment for Mellon on Gracemont's counterclaim because the facts do not excuse Mellon's failure to tender the superpriority portion of the unpaid HOA dues.
A grant of summary judgment is reviewed de novo. Desire, LLC v. Manna Textiles, Inc., 986 F.3d 1253, 1259 (9th Cir. 2021). Viewing the evidence in the light most favorable to the non-movant, we determine whether there are any genuine disputes of material fact. Social Techs. LLC v. Apple Inc., 4 F.4th 811, 816 (9th Cir. 2021).
In 7510 Perla Del Mar Ave. Tr. v. Bank of Am., N.A., 458 P.3d 348 (Nev. 2020), the Nevada Supreme Court held that actual tender is unnecessary where it is apparent that the other party will not accept it. Id. at 351. Because Gracemont does not question the application of Perla Del Mar, its challenge is to the district court's factual findings.
Gracemont argues that because the HOA and the HOA's agent are different entities from the entities in Perla Del Mar, Mellon failed to demonstrate a “known policy” of rejection by ACS. However, the district court found, based on the exhibits and Mr. Miles's testimony, that in January 2012, ACS had a known practice of rejecting offers to pay the superpriority portions of unpaid HOA dues. The standard set forth in Perla Del Mar, 458 P.3d at 351, is only that “it is apparent the other party will not accept” the tender. Here, credible testimony and evidence established that ACS had a policy of rejecting tender offers and that Mellon was aware of that policy. Because Gracemont offered no contrary evidence, it has failed to present an outstanding dispute of material fact, and the district court properly granted summary judgment against Gracemont on its counterclaim.
2. Mellon argues on its cross-appeal that its action for quiet title and declaratory relief was timely. The district court held that the four-year statute of limitations in Nevada Revised Statue § 11.220 applied, and that the statute ran from the date of the foreclosure sale. In U.S. Bank, N.A. v. Thunder Properties, Inc., 503 P.3d 299 (Nev. 2022), the Nevada Supreme Court agreed with the district court that the four-year statute of limitations in NRS § 11.220 applied to foreclosure actions, but held that "an HOA foreclosure sale-standing alone-does not sufficiently call the bank's deed of trust into question to trigger the statute of limitations." Id. at 307. The Nevada Supreme Court reasoned that "the statute of limitations should not run against a lienholder until it has something closely analogous to 'notice of disturbed possession,' such as repudiation of the lien." Id. at 306.
We asked the parties to file supplemental briefs "addressing what action, if any, Appellant 4655 Gracemont Avenue Trust, took between the foreclosure sale on June 13, 2012, and January 16, 2013, that is sufficient to start the running of the four-year statute of limitations" pursuant to Thunder Properties.
In its supplemental brief, Gracemont argued that: (a) pursuant to Thunder Properties, "notice of disturbed possession does not require much"; (b) November 29, 2011, when ACS refused to acknowledge the superpriority portion, was the trigger date; (c) January 12, 2012, when Mellon attempted to get information about the superpriority amount, was the trigger date; and (d) June 13, 2022, when the foreclosure deed was recorded, was the trigger date. Finally, Gracemont asserts that July 1, 2012, when the next installment on Mellon's loan became due, was the trigger date.
None of Gracemont's assertions have merit. We read Thunder Properties as rejecting all the dates suggested by Gracemont prior to and including the recording of the foreclosure sale. We also agree with Mellon that the failure to make the installment payment does not trigger the statute of limitations because, under Thunder Properties, Gracemont's inaction is not "something more" that would trigger the statute of limitations. Gracemont in its supplemental brief and at oral argument has not suggested that it undertook any affirmative action between June 13, 2012, and January 16, 2013, that would trigger the statute of limitations under Thunder Properties.
Accordingly, because Gracemont has failed to show that the statute of limitations was triggered before January 16, 2013, we find that Mellon's action was timely filed. The district court's order dismissing Mellon's action as untimely is vacated and the matter is remanded to the district court for entry of judgment in favor of Mellon.
Affirmed in part, vacated in part, and remanded for entry of judgment in favor of Mellon. Costs on appeal are awarded to Mellon.
The Honorable Ronald Lee Gilman, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation.