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Ditech Fin. v. Spring Mountain Ranch HOA

United States Court of Appeals, Ninth Circuit
Oct 24, 2022
No. 20-15498 (9th Cir. Oct. 24, 2022)

Opinion

20-15498

10-24-2022

DITECH FINANCIAL LLC, Plaintiff-counter- defendant-Appellee, v. SPRING MOUNTAIN RANCH HOA, Defendant, and SFR INVESTMENTS POOL 1, LLC, Defendant-counter-claimant- cross-claimant-Appellant, v. MICHELLE BOWSER; JERRY BOWSER, Cross-claim-defendants.


NOT FOR PUBLICATION

Submitted October 19, 2022 San Francisco, California

This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.

Appeal from the United States District Court 2:15-cv-00630-APG-NJK for the District of Nevada Andrew P. Gordon, District Judge, Presiding

Before: GILMAN, CALLAHAN, and VANDYKE, Circuit Judges.

The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2).

MEMORANDUM

SFR Investments Pool 1, LLC ("SFR") appeals from the district court's grant of summary judgment for Ditech Financial LLC ("Ditech") in a quiet title and declaratory relief action involving residential property located in Las Vegas, Nevada. We have jurisdiction under 12 U.S.C. § 1291, review de novo, Berezovsky v. Moniz, 869 F.3d 923, 927 (9th Cir. 2017), and affirm.

This case arises from a foreclosure sale to satisfy a homeowners association ("HOA") "superpriority 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; Bank of Am., N.A. v. Arlington W. Twilight Homeowners Ass n, 920 F.3d 620, 621-22 (9th Cir. 2019) (per curiam). However, the Federal Foreclosure Bar, 12 U.S.C. § 4617(j)(3), prohibits the foreclosure of Federal Housing Finance Agency ("FHFA") property without FHFA's consent. The Federal Foreclosure Bar thus preempts the Nevada superpriority lien scheme. See Berezovsky, 869 F.3d at 931.

SFR advances a single argument on appeal: that Ditech's complaint was not timely filed under the applicable statute of limitations, which it argues is three years under 12 U.S.C. § 4617(b)(12)(A)(ii). This argument is foreclosed by established precedent holding that the six-year statute of limitations under 12 U.S.C. § 4617(b)(12)(A)(i) applies to claims invoking the Federal Foreclosure Bar like the ones presented by Ditech here because they are more akin to contract claims than tort claims. See M &T Bank v. SFR Invs. Pool 1, LLC, 963 F.3d 854, 856, 859 (9th Cir. 2020), cert. denied, 141 S.Ct. 2566 (2021); see also Nationstar Mortgage LLC v. Saticoy Bay LLC, Series 9229 Millikan Avenue, 996 F.3d 950, 955 (9th Cir. 2021). Like the claim in M &T Bank, Ditech's claim, as record beneficiary for the deed of trust and loan servicer, was entirely dependent on Fannie Mae's lien on the property, an interest created by contract. Further, unlike in a tort claim, Ditech did not seek damages or claim breach of a duty resulting in injury. Even if, as SFR contends, M &T Bank were wrongly decided, we, as a three-judge panel, are bound by that decision. See Miller v. Gammie, 335 F.3d 889, 893 (9th Cir. 2003) (en banc).

Ditech filed its original complaint less than two years after the November 2013 HOA foreclosure sale and its amended complaint less than six years after the HOA foreclosure sale. We need not address Ditech's alternative argument on appeal regarding the relation back doctrine because the operative amended complaint was timely filed under the applicable statute of limitations set forth in M &T Bank even using its August 7, 2019, filing date.

The motion to certify to the Nevada Supreme Court the question of "[w]hether a quiet title claim based on 4617(j)(3) . . . is a contract claim" (Dkt. No. 14) is DENIED because it has no bearing on the resolution of this appeal.

The district court's grant of judgment for Ditech is AFFIRMED.

The Honorable Ronald Lee Gilman, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation.


Summaries of

Ditech Fin. v. Spring Mountain Ranch HOA

United States Court of Appeals, Ninth Circuit
Oct 24, 2022
No. 20-15498 (9th Cir. Oct. 24, 2022)
Case details for

Ditech Fin. v. Spring Mountain Ranch HOA

Case Details

Full title:DITECH FINANCIAL LLC, Plaintiff-counter- defendant-Appellee, v. SPRING…

Court:United States Court of Appeals, Ninth Circuit

Date published: Oct 24, 2022

Citations

No. 20-15498 (9th Cir. Oct. 24, 2022)