NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUL 7 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
NATIONSTAR MORTGAGE LLC; No. 20-16893
FEDERAL NATIONAL MORTGAGE
ASSOCIATION, D.C. No.
2:16-cv-02771-APG-NJK
Plaintiffs-Appellees,
v. MEMORANDUM*
SFR INVESTMENTS POOL 1, LLC,
Defendant-Appellant,
and
SOUTHERN HIGHLANDS COMMUNITY
ASSOCIATION; ALESSI & KOENIG,
LLC,
Defendants.
Appeal from the United States District Court
for the District of Nevada
Andrew P. Gordon, District Judge, Presiding
Submitted April 13, 2022**
Pasadena, California
*
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).
Before: BADE and LEE, Circuit Judges, and CARDONE,*** District Judge.
SFR Investments Pool 1, LLC (“SFR”), appeals the district court’s denial of
its motions to compel and for discovery under Federal Rule of Civil Procedure
56(d) and the district court’s grant of partial summary judgment in favor of
Plaintiffs, the Federal National Mortgage Association (“Fannie Mae”) and
Nationstar Mortgage LLC. We have jurisdiction under 28 U.S.C. § 1291, and we
affirm.
This case arises from a homeowners’ association (“HOA”) foreclosure sale.
Section 116.3116 of the Nevada Revised Statutes gives a common-interest
community such as an HOA a superpriority lien for certain unpaid expenses and
allows an HOA to foreclose on such a lien and extinguish a first deed of trust. See
W. Sunset 2050 Tr. v. Nationstar Mortg., LLC, 420 P.3d 1032, 1033, 1035 (Nev.
2018). Under the Federal Foreclosure Bar, 12 U.S.C. § 4617(j)(3), property of the
Federal Housing Finance Administration (“FHFA”)—the conservator of Fannie
Mae—may not be subject to foreclosure without FHFA consent. Because the
Federal Foreclosure Bar preempts the Nevada HOA law, a Nevada HOA
foreclosure sale does not extinguish a deed owned by Fannie Mae, unless the
FHFA consents. See Berezovsky v. Moniz, 869 F.3d 923, 930–31 (9th Cir. 2017).
***
The Honorable Kathleen Cardone, United States District Judge for the
Western District of Texas, sitting by designation.
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In June 2007, 10932 Florence Hills Street, Las Vegas, Nevada (“the
Property”) was purchased by its original owner with a mortgage. Plaintiffs
contend that Fannie Mae acquired the mortgage in July 2007. The homeowner
later defaulted on his HOA assessments. In September 2012, the HOA foreclosed
on the Property and sold it to SFR.
In December 2016, Plaintiffs sued SFR to quiet title and for related relief. In
June 2020, Plaintiffs moved for partial summary judgment on their claim that the
HOA sale did not extinguish Fannie Mae’s interest in the Property. SFR then filed
a motion to compel production of the promissory note secured by the Property’s
deed, arguing that M & T Bank v. SFR Investments Pool 1, LLC, 963 F.3d 854 (9th
Cir. 2020), required Fannie Mae to produce the note to demonstrate its ownership
interest in the Property. SFR also requested discovery of the note and related
evidence under Federal Rule of Civil Procedure 56(d). The district court denied
SFR’s motions and granted Plaintiffs’ motion for partial summary judgment. SFR
appeals those rulings.
1. The district court did not abuse its discretion in denying SFR’s motions to
compel production and for discovery of the promissory note because the Nevada
Supreme Court has held that the note is not required to prove an ownership interest
in this context. See Daisy Tr. v. Wells Fargo Bank, N.A., 445 P.3d 846, 850 (Nev.
2019) (holding, in a similar case, that the note was not required because it “would
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not help establish when Freddie Mac obtained ownership of the loan or that it
retained such ownership as of the date of the foreclosure sale”).
We reject SFR’s argument that M & T Bank requires production of the note.
SFR reads M & T Bank to hold that quiet title claims under the Federal Foreclosure
Bar sound in contract, so the contract that creates Fannie Mae’s ownership interest
in the Property—the note—must be produced. This is incorrect. M & T Bank
classified quiet title claims under the Federal Foreclosure Bar as contract claims
for purposes of the statute of limitations—it did not address the evidence required
to prove the ownership element of such claims. See 963 F.3d at 856 (holding that,
for purposes of the statute of limitations, quiet title claims are “better characterized
as sounding in contract”).
2. SFR’s motion for further discovery of evidence other than the note was also
properly denied because SFR failed to diligently pursue the requested evidence
during the discovery period. See Qualls ex. rel. Qualls v. Blue Cross of Cal., Inc.,
22 F.3d 839, 844 (9th Cir. 1994) (“We will only find that the district court abused
its discretion [in denying further discovery] if the movant diligently pursued its
previous discovery opportunities . . . .”).
3. Finally, the district court properly granted partial summary judgment for
Plaintiffs because they have sufficiently established that Fannie Mae had an
ownership interest in the Property at the time of foreclosure. Plaintiffs submitted
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Fannie Mae’s business records documenting its purchase and maintenance of the
loan, a supporting declaration, and excerpts from Fannie Mae’s Single Family
Servicing Guide that define the agency relationship between Fannie Mae and its
loan servicers, which serve as the beneficiaries on deeds owned by Fannie Mae.
This Court and the Nevada Supreme Court have routinely found this combination
of evidence to be sufficient to establish ownership of a loan at the time of
foreclosure. See e.g., Berezovsky, 869 F.3d at 932–33; Daisy Tr., 445 P.3d at 850–
51; Nationstar Mortg. LLC v. Saticoy Bay LLC, Series 9229 Millikan Ave., 996
F.3d 950, 956 (9th Cir. 2021). Moreover, the record does not support SFR’s
assertion that Fannie Mae’s business records are unreliable.
AFFIRMED.
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