Opinion
20-15698
10-27-2022
WELLS FARGO BANK., N.A.; FEDERAL NATIONAL MORTGAGE ASSOCIATION Plaintiffs-Appellees, v. PINE BARRENS STREET TRUST, Defendant-Appellant, and RMI MANAGEMENT LLC, DBA Red Rock Financial Services; VENEZIA COMMUNITY ASSOCIATION, Defendants.
NOT FOR PUBLICATION
Submitted October 19, 2022 [**] San Francisco, California
Appeal from the United States District Court for the District of Nevada, No. 2:17-cv-01517-RFB-VCF Richard F. Boulware II, District Judge, Presiding
Before: GILMAN, [***] CALLAHAN, and VANDYKE, Circuit Judges.
MEMORANDUM [*]
Pine Barrens Street Trust ("Pine Barrens") appeals from the district court's grant of summary judgment in favor of Wells Fargo Bank, N.A. ("Wells Fargo") in a quiet title and declaratory relief action involving residential property located in Las Vegas, Nevada. We have jurisdiction under 28 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. 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), which prohibits the foreclosure of Federal Housing Finance Agency ("FHFA") property without FHFA's consent, preempts the Nevada superpriority lien scheme. See Berezovsky, 869 F.3d at 931.
In the present case, the district court held that, because the property was subject to a deed of trust held by the Federal National Mortgage Association ("Fannie Mae"), the Federal Foreclosure Bar prohibited the deed of trust from being extinguished in the absence of FHFA's consent.
Pine Barrens' arguments to the contrary are foreclosed by our prior decision in Nationstar Mortgage LLC v. Saticoy Bay LLC, 996 F.3d 950 (9th Cir. 2021).
First, Pine Barrens contests the applicability of the Federal Foreclosure Bar to the deed at issue, asserting that (1) the nonjudicial foreclosure of the HOA's superpriority lien extinguished the deed of trust held by Fannie Mae and serviced by Wells Fargo; (2) Nevada law controls whether Fannie Mae held an interest in the property or deed of trust at the time Pine Barrens purchased the property; (3) the Federal Foreclosure Bar did not prevent the deed of trust from being extinguished because Fannie Mae did not comply with Nevada law; and (4) FHFA's consent was not required because Fannie Mae did not hold any enforceable interest in the deed of trust.
All of these arguments were rejected in Nationstar, which concerned a similar HOA foreclosure sale. There, relying on clearly established precedent, we held that a loan servicer has standing to assert the Federal Foreclosure Bar on behalf of Fannie Mae and that the Bar preempts Nevada's superpriority lien scheme. Nationstar, 996 F.3d at 955-57. As in Nationstar, "Fannie Mae was in FHFA conservatorship," "Fannie Mae owned the Deed," and "[Wells Fargo] served as Fannie Mae's loan servicer" when the property was foreclosed. See id. at 955-56. Thus, the Federal Foreclosure Bar applies and preempts Nevada law.
Second, Pine Barrens' arguments challenging the documentation of Fannie Mae's interest are also foreclosed by Nationstar. Pine Barrens asserts that it has standing to raise the statute of frauds provision found in NRS 111.205(1), and that NRS 111.325 expressly protects Pine Barrens from Fannie Mae's unrecorded interest. We rejected these arguments in Nationstar, holding that a third party cannot assert the statute of frauds as a defense when it was not a party to the underlying loan agreement, and that Nevada recording statutes "do not require Fannie Mae to be identified as the beneficiary of record . . . '[or to] publicly record its ownership interest as a prerequisite for establishing that interest.'" Nationstar, 996 F.3d at 957 (quoting Daisy Tr. v. Wells Fargo Bank, 445 P.3d 846, 847-49 (Nev. 2019)).
Finally, Pine Barrens' argument that Wells Fargo's request for declaratory relief based on 12 U.S.C. § 4617(j)(3) is barred by the applicable statute of limitations does not survive Nationstar. In Nationstar, we held that where the Federal Foreclosure Bar is invoked, "the applicable statute of limitations is six years under 12 U.S.C. § 4617(b)(12)(A)." Id. at 955 (citing M&T Bank v. SFR Inv. Pool, LLC, 963 F.3d 854, 856 (9th Cir. 2020)). Because Wells Fargo filed its claims in May 2017, less than six years after the October 2012 HOA sale, the action is not time-barred.
The district court's grant of summary judgment for Wells Fargo is AFFIRMED.
Simultaneous with the filing of this opinion, we issue an order to show cause why Pine Barrens and its counsel should not be sanctioned for maintaining frivolous appeals. Fed. R. App. P. 38; see also 28 U.S.C. § 1912.
[*] This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.
[**] The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2).
[***] The Honorable Ronald Lee Gilman, Senior Judge of the United States Court of Appeals for the Sixth Circuit, sitting by designation.