Nationstar Mortgage, LLC v. 7505 Java Sparrow Trust

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
NATIONSTAR MORTGAGE, LLC,
Plaintiff-Appellee,
v.
7505 JAVA SPARROW TRUST,
Defendant-Appellant,
and
CLUB ALIANTE HOMEOWNERS
ASSOCIATION; NEVADA
ASSOCIATION SERVICES, INC.,
Defendants.
No. 20-17336
D.C. No.
2:15-cv-00196-APG-EJY
MEMORANDUM*
Appeal from the United States District Court
for the District of Nevada
Andrew P. Gordon, District Judge, Presiding
Submitted November 15, 2021**
San Francisco, California
FILED
NOV 17 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* 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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Before: SCHROEDER, W. FLETCHER, and MILLER, Circuit Judges.
7505 Java Sparrow Trust (“the Trust”) appeals the district court’s grant of
summary judgment to Nationstar Mortgage, LLC. This case arises from a non-
judicial foreclosure sale to satisfy a homeowners’ association (“HOA”)
superpriority lien, conducted by the HOA’s agent, Nevada Association Services
(“NAS”). At the time of the foreclosure sale, Bank of America, N.A. (“BANA”)
was the authorized loan servicer for this property. Nationstar is the current
authorized loan servicer of the deed of trust that secured the original homeowners’
loan to purchase the property. Nationstar sought a declaration that the HOA sale
by NAS to the Trust did not extinguish the deed of trust securing the original
purchase.
Ordinarily under Nevada state law, when a bank tenders payment of the full
superpriority amount to an HOA before an HOA foreclosure sale, the tender
discharges the superpriority lien. Bank of Am., N.A. v. SFR Invs. Pool 1, LLC, 427
P.3d 113, 116 (Nev. 2018). The Nevada State Supreme Court recently held,
however, that when NAS had a known policy of rejecting tendered payments,
BANA was excused from making a formal tender. 7510 Perla Del Mar Ave Tr. v.
Bank of Am., N.A. (“Perla”), 458 P.3d 348, 351–52 (Nev. 2020).
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In granting summary judgment to Nationstar, the district court in this case
relied on Perla and the evidence in the record in that case—which was also before
the court in this case. It showed that: (1) at the time of this sale, NAS had a policy
of rejecting checks for the superpriority portion of the lien; (2) BANA knew about
this policy; and (3) BANA was excused from making formal tender in this
instance.
Appellants contend that Perla established only that there was a policy and
BANA was aware of that policy between early 2012 and July 2013. In this case
NAS mailed the notice of delinquent assessment lien for the property in July 2010,
and the sale occurred in October 2011. Assuming for the sake of argument that
July 2010 through October 2011 is the relevant time period for this case, the record
contains ample evidence of NAS’s rejections of formal tenders and BANA’s
awareness of this policy during that time.
For example, David Stone—the founder, CEO, and owner of NAS—testified
that NAS’s policy was to reject formal tender from 2010–2014. Susan Moses—the
paralegal and custodian of records at NAS—confirmed in her testimony that NAS
refused formal tender sent by Miles, Bauer, Bengstrom & Winters, LLP (“Miles
Bauer”) in 2011. BANA’s counsel at the time, Miles Bauer, submitted affidavits
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showing that NAS rejected formal tenders between March 2011 and November
2011.
A subsidiary of BANA filed a lawsuit in January 2011 against numerous
homeowners’ associations and their trustees, including NAS, asserting that it
tendered payments that would satisfy the superprority lien, but the trustees were
rejecting those payments. Thus not only did BANA know about NAS’s policy
during the relevant time frame, but one of its subsidiaries also took legal action to
attempt to address the problem.
Appellants also contend Perla does not control here because BANA made
no attempt to tender the superpriority portion of the lien for the property at issue in
this case. This argument is contrary to the opinion in Perla itself, because the
Nevada Supreme Court held that the tender requirement is waived when a party
entitled to payment had a known policy of rejecting such payments. Perla, 458
P.3d at 351. Accordingly, no attempted tender was required.
The district court correctly granted summary judgment to Nationstar.
AFFIRMED.
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