Nationstar Mortgage, LLC v. Saticoy Bay LLC Series 2227 Shadow CanyonAnnotate this Case
In the wake of Shadow Wood Homeowners Ass’n v. New York Community Bankcorp, Inc., 355 P.3d 1105 (Nev. 2016), the Supreme Court took the opportunity in this case to provide further clarification as to whether a homeowners’ association (HOA) foreclosure sale can be set aside based on commercial unreasonableness or solely on low sales price.
Saticoy Bay instituted a quiet title action after buying property located in a neighborhood governed by an HOA at a foreclosure sale held by the HOA. Saticoy Bay named Nationstar Mortgage as a defendant and sought a declaration that the sale extinguished Nationstar’s deed of trust. The district court granted summary judgment in favor of Saticoy Bay. The Supreme Court affirmed, holding (1) the commercial reasonableness standard, derived from Article 9 of the Uniform Commercial Code, has no applicability in the context of an HOA foreclosure involving the sale of real property; (2) Shadow Wood did not overturn the court’s longstanding rule that inadequacy of price is not a sufficient ground for setting aside a trustee’s sale absent fraud, unfairness or oppression that brings about the price inadequacy; and (3) because Nationstar’s identified irregularities did not establish that fraud, unfairness or oppression affected the sale, summary judgment was properly granted for Saticoy Bay.