NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAR 16 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
U.S. BANK, N.A., No. 19-16750
Plaintiff-counter- D.C. No.
defendant-Appellee, 2:16-cv-00866-GMN-BNW
v.
LONE MOUNTAIN QUARTETTE MEMORANDUM*
COMMUNITY ASSOCIATION,
Defendant,
and
BDJ INVESTMENTS, LLC,
Defendant-counter-claimant-
Appellant.
Appeal from the United States District Court
for the District of Nevada
Gloria M. Navarro, District Judge, Presiding
Submitted March 12, 2021**
San Francisco, California
Before: WALLACE, GOULD, and FRIEDLAND, Circuit Judges.
*
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).
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BDJ Investments, LLC, (BDJ) appeals from the district court’s summary
judgment for U.S. Bank, N.A. (U.S. Bank). We have jurisdiction under 28 U.S.C.
§ 1291. “We review a district court’s summary judgment de novo. We must
determine, viewing the evidence in the light most favorable to the nonmoving
party, whether there are any genuine issues of material fact and whether the district
court correctly applied the substantive law.” Zabriskie v. Fed. Nat’l Mortg. Ass’n,
940 F.3d 1022, 1026 (9th Cir. 2019) (citation and quotation marks omitted). We
vacate the district court’s summary judgment and remand with instructions to
consider the Nevada Supreme Court’s decisions in Bank of America, N.A. v.
Thomas Jessup, LLC Series VII (Jessup II), 462 P.3d 255 (Nev. 2020) (en banc)
(unpublished) and 7510 Perla Del Mar Avenue Trust v. Bank of America, N.A
(Perla Del Mar), 458 P.3d 348 (Nev. 2020) (en banc).
An individual (the homeowner) obtained a loan to purchase a Nevada
property. The promissory note on the loan was secured by a first deed of trust,
which was eventually assigned to U.S. Bank. The loan servicer was Bank of
America, N.A. (BANA). The property was located within a homeowners
association, the Lone Mountain Quartette Community Association (the HOA).
The homeowner was obligated to make assessment payments to the HOA. When
the homeowner fell behind on his payments, the HOA through its agent Absolute
Collection Services, LLC (ACS) recorded a lien on the property.
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BANA, through its counsel Miles, Bauer, Bergstrom & Winters, LLP (Miles
Bauer) sent a letter to the HOA asking for an account statement for the past nine
months and offering to pay the amount. ACS replied via fax, representing ACS’s
“view that without the action of foreclosure, a 9 month Statement of Account is not
valid.” ACS’s fax also stated “[w]e recognize your client’s position as . . . the
senior lien holder.” BANA took no further action. The HOA foreclosed on the
property by public auction, and BDJ purchased the property. U.S. Bank
commenced this action against the HOA and BDJ, asserting claims for, among
other things, quiet title.
Nevada law “provides a homeowners’ association . . . with a superpriority
lien that, when properly foreclosed upon, extinguishes a first deed of trust. . . . [A]
deed of trust beneficiary can preserve its deed of trust by tendering the
superpriority portion of the HOA’s lien before the foreclosure sale is held.” Perla
Del Mar, 458 P.3d at 348.
In July 2019, the district court entered summary judgment for U.S. Bank,
holding that the case was “materially indistinguishable” from Bank of America,
N.A. v. Thomas Jessup, LLC Series VII (Jessup I), 435 P.3d 1217 (Nev. 2019) (per
curiam), aff’d in part, rev’d in part en banc, 462 P.3d 255 (Nev. 2020). In Jessup
I, a three-judge panel of the Nevada Supreme Court held that an identical letter
from ACS to BANA “refut[ing] Miles Bauer’s position of paying for 9 months of
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assessments” before foreclosure by BANA indicated that ACS would reject any
attempt by BANA to tender the superpriority portion of the homeowner
association’s lien and thereby excused BANA’s obligation to tender. 435 P.3d at
1220. Here, the district court held that, in light of Jessup I, “BANA’s letter
offering to pay, coupled with ACS’s rejection, served to satisfy the default as to the
HOA superpriority lien such that the sale did not extinguish the first deed of trust.”
In February 2020, while this appeal was pending, the Nevada Supreme Court
in Perla Del Mar again addressed when a tender obligation may be excused. That
case involved facts that are now familiar: a Miles Bauer attorney had written on
behalf of BANA to an HOA’s collection agent requesting an account of the
superpriority portion of the lien, so that BANA could pay the superpriority portion
and preserve its deed of trust. Perla Del Mar, 458 P.3d at 349. The collection
agent received the letter but did not respond. Id. The Nevada Supreme Court held
that BANA’s tender obligation was excused because “formal tender is excused
when evidence shows that the party entitled to payment had a known policy of
rejecting such payments.” Id.
In May 2020, in an unpublished order, the Nevada Supreme Court sitting en
banc reversed Jessup I in part and held that in spite of the foreclosure agent’s
letter, BANA “did not establish that ACS had a known policy of rejecting
superpriority tenders such that formal tender should have been excused.” Jessup
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II, 462 P.3d at 255. The court refused to set aside the foreclosure sale on equitable
grounds because the district court had not clearly erred in finding that BANA’s
counsel from Miles Bauer “understood that failure to pay the superpriority portion
of the lien would result in the loss of his client’s interest in the property.” Id.
Under Jessup II, ACS’s representations—including that a “9 month statement of
account is not valid” and “[w]e recognize your client’s position as . . . the senior
lien holder”—are not sufficient to excuse an obligation to tender the superpriority
portion of a HOA lien as to void the sale.
The district court did not have the benefit of Perla Del Mar or Jessup II. We
vacate the district court’s summary judgment and remand with instructions for the
district court to reconsider the case in light of those cases.
VACATED AND REMANDED
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