427 P.3d 113 (Nev. 2018), 70501, Bank of America, N.A. v. SFR Investments Pool 1, LLC

Docket Nº:70501
Citation:427 P.3d 113, 134 Nev.Adv.Op. 72
Opinion Judge:PICKERING, J.:
Party Name:BANK OF AMERICA, N.A., Successor by Merger to BAC Home Loans Servicing, LP, f/k/a Countrywide Home Loans Servicing, LP, Appellant, v. SFR INVESTMENTS POOL 1, LLC, a Nevada Limited Liability Company, Respondent.
Attorney:Akerman, LLP, and Darren T. Brenner, Thera A. Cooper, and Vatana Lay, Las Vegas, for Appellant. Kim Gilbert Ebron and Jacqueline A. Gilbert, Howard C. Kim, Zachary Clayton, and Jason G. Martinez, Las Vegas, for Respondent.
Judge Panel:We concur: Douglas, C.J., Gibbons, J., Parraguirre, J., Cherry, J., Hardesty, J., Stiglich, J.
Case Date:September 13, 2018
Court:Supreme Court of Nevada
 
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427 P.3d 113 (Nev. 2018)

134 Nev.Adv.Op. 72

BANK OF AMERICA, N.A., Successor by Merger to BAC Home Loans Servicing, LP, f/k/a Countrywide Home Loans Servicing, LP, Appellant,

v.

SFR INVESTMENTS POOL 1, LLC, a Nevada Limited Liability Company, Respondent.

No. 70501

Supreme Court of Nevada

September 13, 2018

As Amended on Denial of Rehearing November 13, 2018

Page 114

[Copyrighted Material Omitted]

Page 115

[Copyrighted Material Omitted]

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Appeal from a district court order granting summary judgment to the buyer and denying summary judgment to the first deed of trust holder in a quiet title action following an HOA lien foreclosure sale. Eighth Judicial District Court, Clark County; Valerie Adair, Judge.

Akerman, LLP, and Darren T. Brenner, Thera A. Cooper, and Vatana Lay, Las Vegas, for Appellant.

Kim Gilbert Ebron and Jacqueline A. Gilbert, Howard C. Kim, Zachary Clayton, and Jason G. Martinez, Las Vegas, for Respondent.

BEFORE THE COURT EN BANC.

OPINION

PICKERING, J.:

This is a quiet title dispute between the buyer at an HOA lien foreclosure sale and the holder of the first deed of trust on the property. The holder of the first deed of trust tendered the amount needed to satisfy the superpriority portion of the lien to the HOA before the sale but the trustee proceeded with foreclosure anyway. The question presented is whether the buyer took title subject to the first deed of trust. We hold that a first deed of trust holder’s unconditional tender of the superpriority amount due results in the buyer at foreclosure taking the property subject to the deed of trust. We therefore reverse the district court’s grant of summary judgment for SFR Investments Pool 1, LLC and remand for further proceedings consistent with this opinion.

I.

In 2012, the original owner of 3617 Diamond Spur Avenue (Property) fell behind on his payments to the Sutter Creek Homeowners Association (HOA). The HOA initiated foreclosure proceedings, recording a delinquent assessment lien and a notice of default and election to sell. After receiving notice of the default, Bank of America, the holder of the first deed of trust on the property, contacted the HOA, seeking to clarify the superpriority amount and offering to pay that amount in full. Based on the HOA’s representations, Bank of America tendered payment of $720— nine months’ worth of assessment fees— to the HOA. The letter included with the tender stated that the HOA’s acceptance would be an "express agreement that [Bank of America]’s financial obligations towards the HOA in regards to the [Property] have now been ‘paid in full.’ " The HOA rejected the payment and sold the

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property at foreclosure to respondent SFR Investments Pool 1, LLC.

After the foreclosure sale, litigation ensued with Bank of America and SFR both claiming title to the Property. On cross-motions for summary judgment, the district court granted summary judgment to SFR and denied summary judgment to Bank of America, from which order Bank of America timely appealed. The case was routed to the court of appeals, which reversed and remanded. SFR then petitioned for review of the decision under NRAP 40B(a), which we granted.

II.

Bank of America argues that its tender was valid and satisfied the superpriority portion of the HOA’s lien. SFR responds that the HOA’s rejection was in good faith because at the time of the tender it was unsettled as to the amount of the superpriority portion of the lien, and the tender was conditional. SFR also asserts that it is protected as a bona fide purchaser of the property.

The grant or denial of summary judgment is reviewed de novo. Wood v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026, 1029 (2005). Summary judgment is appropriate if the pleadings and other evidence on file, viewed in the light most favorable to the nonmoving party, demonstrate that no genuine issue of material fact remains in dispute and that the moving party is entitled to judgment as a matter of law. Id. "A genuine issue of material fact exists if, based on the evidence presented, a reasonable jury could return a verdict for the nonmoving party." Butler ex rel. Biller v. Bayer, 123 Nev. 450, 457-58, 168 P.3d 1055, 1061 (2007).

A.

Bank of America asserts that it tendered the correct amount to satisfy the superpriority portion of the HOA lien and that it was not required to do more. A valid tender of payment operates to discharge a lien or cure a default. Power Transmission Equip. Corp. v. Beloit Corp., 55 Wis.2d 540, 201 N.W.2d 13, 16 (1972) ("Common-law and statutory liens continue in existence until they are satisfied or terminated by some manner recognized by law. A lien may be lost by ... payment or tender of the proper amount of the debt secured by the lien."); see also 74 Am.Jur.2d Tender § 41 (2012). Valid tender requires payment in full. Annotation, Tender as Affected by Insufficiency of Amount Offered, 5 A.L.R. 1226 (1920). The HOA refused to accept Bank of America’s tender, because it did not satisfy both the superpriority and subpriority portions of the lien.

NRS 116.3116 governs liens against units for HOA assessments and details the portion of the lien that has superpriority status. At the time of the tender in 2012, the statute provided that the superpriority portion of an HOA lien was prior to a first security interest on a unit to the extent of any charges incurred by the association on a unit pursuant to NRS 116.310312 [maintenance and nuisance abatement] and to the extent of the assessments for common expenses based on the periodic budget adopted by the association pursuant to NRS 116.3115 which would have become due in the absence of acceleration during the 9 months immediately preceding institution of an action to enforce the lien.

NRS 116.3116(2) (2012). A plain reading of this statute indicates that the superpriority portion of an...

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