CitiMortgage, Inc. v. Corte Madera Homeowners Ass'n, No. 17-16404 (9th Cir. 2020)
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Citi filed suit against Corte Madera Homeowners Association for wrongful foreclosure, breach of the statutory duty of good faith by Nev. Rev. Stat. 116.1113, and quiet title. Nev. Rev. Stat. 116.3116(1) allows HOAs to pursue liens on members' homes for unpaid assessments and charges. The district court granted summary judgment in favor of defendants.
The Ninth Circuit affirmed the district court's ruling regarding the adequacy of the lender's tender, holding that BANA's offer did not constitute valid tender. The panel held that 7510 Perla Del Mar Ave Tr. v. Bank of America, N.A., 458 P.3d 348, 350-51 (Nev. 2020) (en banc) -- which held that a mere offer to pay at a later time, after the superpriority amount was determined, does not constitute a valid tender -- did not alter the validity of Citi's tender because BANA insisted on the same condition that Perla Del Mar prohibited. The panel held that the district court did not err when it concluded that Citi was obligated to satisfy the superpriority portion of the lien in order to protect its interest. Furthermore, the district court did not err by observing that Citi's offer to pay nine months' assessments was not the equivalent of an offer to pay the superpriority portion of Corte Madera's lien. Therefore, in light of Perla Del Mar, the district court did not err by ruling that Citi's tender was impermissibly conditional. The panel rejected Citi's alternative arguments. However, the panel remanded for reconsideration of the complaint's allegation that Corte Madera's foreclosure notices violated the homeowner's bankruptcy stay.
Court Description: Nevada Foreclosure Law. The panel affirmed in part, and reversed in part, the district court’s judgment in an action brought by CitiMortgage, Inc. (“Citi”) against a Nevada homeowners association (“HOA”) for wrongful foreclosure, breach of the statutory duty of good faith required by Nev. Rev. Stat. 116.1113, and quiet title. Nev. Rev. Stat. § 116.3116(1) allows HOAs to pursue liens on members’ homes for unpaid assessments and charges. HOA liens are split into superpriority and subpriority components. The superpriority component is prior to all other liens, including first deeds of trust; and it comprises nine months’ worth of common assessments and any nuisance-abatement or maintenance charges. An HOA may foreclose on its superpriority lien through a non-judicial foreclosure sale. Citi argued that the HOA’s non-judicial foreclosure sale did not extinguish its interest because Citi’s predecessor, Bank of America, N.A. (“BANA”), tendered the superpriority portion of the lien to the HOA. The panel rejected Citi’s request to remand the appeal to the district court in light of intervening case law in 7510 Perla Del Mar Ave Tr. v. Bank of America, N.A., 458 P.3d 348, 350-51 (Nev. 2020) (en banc) (holding that a mere offer to pay at a later time, after the superpriority amount was determined, does not constitute a CITIMORTGAGE V. CORTE MADERA HOA 3 valid tender), because Perla Del Mar did not alter the validity of Citi’s tender where in this case BANA insisted on the same condition that Perla Del Mar prohibited. The panel held that the district court did not err when it concluded that Citi was obligated to satisfy the superpriority portion of the lien in order to protect its interest. The panel further held that the district court did not err by observing that Citi’s offer to pay nine months’ assessments was not the equivalent of an offer to pay the superpriority of the HOA’s lien; and in light of Perla Del Mar, the district court did not err by ruling that Citi’s tender was impermissibly conditional. The panel declined to consider Citi’s unpreserved futility-of-tender argument, raised for the first time on appeal, or to remand for further factual development. Citi’s complaint alleged that the HOA foreclosure sale violated the automatic bankruptcy stay that arose pursuant to 11 U.S.C. § 362(a) when the homeowner filed her bankruptcy petition. The panel remanded for the district court to consider whether the property was property of the debtor or of the bankruptcy estate, to determine whether the notices violated the bankruptcy stay, and to address whether Citi has standing to challenge the alleged violation. In a separately filed memorandum disposition, the panel affirmed the district court’s denial of Citi’s due process challenge and the denial of Citi’s argument that the sale should be aside due to an inadequate sale price. 4 CITIMORTGAGE V. CORTE MADERA HOA
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