FILED
NOT FOR PUBLICATION
DEC 02 2019
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
CARRINGTON MORTGAGE No. 17-16554
SERVICES, LLC,
D.C. No.
Plaintiff-Appellant, 2:15-cv-01377-JCM-NJK
v.
MEMORANDUM*
SFR INVESTMENTS POOL 1, LLC; et
al.,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding
Argued and Submitted November 13, 2019
Pasadena, California
Before: GRABER, BERZON, and CHRISTEN, Circuit Judges.
Appellant Carrington Mortgage Services, LLC (CMS) appeals the district
court’s order granting summary judgment to SFR Investments Pool 1, LLC and the
district court’s order dismissing CMS’s wrongful foreclosure claim against Oak
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Park Homeowners’ Association. We have jurisdiction pursuant to 28 U.S.C.
§ 1291, and we affirm in part and reverse in part. Because the parties are familiar
with the facts, we recite only those necessary to resolve the issues on appeal.
1. CMS relied on Bourne Valley Court Trust v. Wells Fargo Bank, NA,
832 F.3d 1154 (9th Cir. 2016), to argue that Nevada Revised Statute § 116.3116 is
facially unconstitutional. This argument is unavailing. The Nevada Supreme
Court subsequently decided SFR Investments Pool 1, LLC v. Bank of New York
Mellon, 422 P.3d 1248 (Nev. 2018) (en banc) (“Star Hill”), and rejected Bourne
Valley’s interpretation of § 116.3116’s notice provisions. Star Hill explained that
the statute incorporates the opt-in and mandatory notice provisions of Nevada
Revised Statute § 107.090. Id. at 1253. Accordingly, Bourne Valley no longer
controls. See Bank of Am., N.A. v. Arlington W. Twilight Homeowners Ass’n, 920
F.3d 620, 623–24 (9th Cir. 2019).
2. CMS’s argument that federal law preempts § 116.3116 is equally
without merit. We rejected the same argument in Arlington West. See 920 F.3d at
624. Nothing in Nevada’s foreclosure statute makes it “impossible for a private
party to comply with both state and federal law,” Crosby v. Nat’l Foreign Trade
Council, 530 U.S. 363, 372 (2000), nor does Nevada law “stand[] as an obstacle to
the accomplishment and execution of the full purpose and objectives of Congress,”
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id. at 373 (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)), in creating the
federal mortgage insurance program.
3. The district court sua sponte dismissed CMS’s wrongful-foreclosure
claim against Oak Park for failure to mediate, pursuant to Nevada Revised Statute
§ 38.310. Although wrongful-foreclosure claims fall within the purview of §
38.310, see McKnight Family, LLP v. Adept Mgmt. Servs., Inc., 310 P.3d 555, 559
(Nev. 2013) (en banc), the district court erred by not affording CMS an opportunity
to respond to its intent to dismiss, see Reed v. Lieurance, 863 F.3d 1196, 1207 (9th
Cir. 2017). Nevertheless, the district court dismissed the claim without prejudice,
and that ruling allowed CMS an opportunity to amend its complaint and
demonstrate that the parties had, in fact, mediated. CMS did not take that
opportunity. Instead, it moved for reconsideration and immediately appealed the
district court’s order. A motion for reconsideration was not the proper vehicle for
CMS to present its proof that the parties had mediated. See, e.g., Kona Enters. Inc.
v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000) (“A Rule 59(e) motion may
not be used to raise arguments or present evidence for the first time when they
could reasonably have been raised earlier in the litigation.”). Thus, the district
court’s sua sponte dismissal was harmless.
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4. CMS’s claim for equitable relief fails because CMS did not
sufficiently allege any causal nexus; that is, it did not allege how the fraud,
oppression, or unfairness accounted for or brought about the property’s inadequate
sale price. See Nationstar Mortg., LLC v. Saticoy Bay LLC Series 2227 Shadow
Canyon, 405 P.3d 641, 647 (Nev. 2017).
5. We conclude the district court erred by granting summary judgment to
SFR on its quiet title claim. Neither SFR nor CMS established that it was entitled
to judgment as a matter of law. A material factual dispute remains as to whether
Bank of America, CMS’s predecessor-in-interest, satisfied the superpriority
portion of Oak Park’s lien, and this factual dispute precluded summary judgment.
Nevada law provides a statutory presumption that foreclosure sales are
properly conducted and that the resulting deeds are valid. See Nev. Rev. Stat.
§ 47.250(16)–(18). CMS bore the burden of overcoming this presumption. See
Res. Grp., LLC v. Nev. Ass’n Servs., 437 P.3d 154, 156 (Nev. 2019) (en banc)
(“The burden of demonstrating that the delinquency was cured presale, rendering
the sale void, was on the party challenging the foreclosure, who failed to meet its
burden.”). Both parties point to the same ledger as proof that Bank of America did
or did not satisfy the superpriority portion of Oak Park’s lien. The district court
reasoned that CMS “merely presume[d]” that the amount set forth on the ledger
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was more than the superpriority portion of the lien. But at oral argument before
our court, SFR conceded that the ledger does not include any line items identified
as “maintenance or nuisance-abatement” fees. Arlington West held that a similar
ledger alone sufficed to demonstrate that no maintenance or nuisance-abatement
fees were due. See 920 F.3d at 623. Here, however, CMS conceded that
qualifying costs, such as collection fees related to abatement, could conceivably be
included in the expenses itemized on the ledger. From the record available, we
cannot determine whether the superpriority portion of the lien was satisfied by the
tender. Therefore, we remand to the district court for further proceedings.
AFFIRMED IN PART, REVERSED IN PART AND REMANDED.
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