BANK OF NEW YORK MELLON, FKA Bank of New York, as Trustee for the Certificateholders… v. Williston Investment Group, LLC

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BANK OF NEW YORK MELLON, FKA
Bank of New York, as Trustee for the
Certificateholders CWALT, Inc.,
Alternative Loan Trust 2006-OA10
Mortgage Pass-Through Certificates,
Plaintiff-Counter-
Defendant-Appellee,
v.
WILLISTON INVESTMENT GROUP,
LLC,
Defendant-Counter-Claimant-
Appellant.
No. 19-16201
D.C. No.
2:18-cv-00161-APG-NJK
MEMORANDUM*
Appeal from the United States District Court
for the District of Nevada
Andrew P. Gordon, District Judge, Presiding
Submitted November 16, 2022**
San Jose, California
Before: SCHROEDER, GRABER, and FRIEDLAND, Circuit Judges.
FILED
NOV 18 2022
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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Real property in Nevada was sold at a homeowners’ association (“HOA”)
foreclosure sale after the homeowners failed to pay required HOA assessments.
The holder of the beneficial interest in the deed of trust, Plaintiff Bank of New
York Mellon, sued various parties, including the current owner of the property,
Defendant Williston Investment Group, LLC. Plaintiff sought a declaration that
the deed of trust remained an encumbrance on the property. Defendant asserted
counterclaims, arguing that it took title free and clear of all preexisting lien
interests. Both parties moved for summary judgment. The district court ruled that
Plaintiff’s claim was untimely under the applicable four-year state statute of
limitations. But the court ruled in Plaintiff’s favor on Defendant’s counterclaim to
quiet title, because Plaintiff had tendered the full superpriority amount of the lien
before the HOA sale occurred, thus preserving Plaintiff’s first-position interest in
the property. Defendant timely appeals. On de novo review, Feldman v. Allstate
Ins. Co., 322 F.3d 660, 665 (9th Cir. 2003), we affirm.
1. Because this is a diversity action, we apply Nevada law. Defendant
argues that a two- or three-year statute of limitations applies. Recently, the Nevada
Supreme Court held that, under Nevada Revised Statutes section 11.220, a
titleholder has four years within which to institute an action to quiet title. U.S.
Bank, N.A. v. Thunder Props., Inc., 503 P.3d 299, 302 (Nev. 2022). Plaintiff filed
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this action more than four years after the foreclosure sale and more than four years
after Defendant valued the property as unencumbered. The district court’s holding
of untimeliness is therefore correct.
2. Defendant also argues that the district court should have granted
summary judgment on Defendant’s counterclaim to quiet title because the
untimeliness of Plaintiff’s claim demonstrates that Plaintiff’s defense is not
cognizable. Plaintiff responded to Defendant’s counterclaim by providing
evidence that it had tendered the full superpriority amount of the HOA lien before
the sale took place, thus defeating Defendant’s claim to quiet title. See Bank of
Am., N.A. v. SFR Invs. Pool 1, LLC, 427 P.3d 113, 121 (Nev. 2018) (“[A]fter a
valid tender of the superpriority portion of an HOA lien, a foreclosure sale on the
entire lien is void as to the superpriority portion, because it cannot extinguish the
first deed of trust on the property.”).
Just as Defendant was entitled to have its counterclaim considered, Plaintiff
was entitled to defend against the counterclaim by demonstrating that full tender of
the superpriority portion of the HOA lien preserved its first-position interest in the
property. Renfroe v. Carrington Mortg. Servs., LLC, 456 P.3d 1055, 2020 WL
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762638, at *1–2 (Nev. Feb. 14, 2020) (unpublished).1 Although Plaintiff’s
affirmative case was time-barred, Nevada law recognizes that a party retains the
right to assert the affirmative defense of tender notwithstanding the statute of
limitations.2 Id. at *2. Notably, Defendant has not argued that it abandoned its
counterclaim or asked that its counterclaim be considered only in the event that
Plaintiff’s claim was not time-barred.3 In sum, the district court, after considering
the facts underlying Plaintiff’s tender defense, correctly concluded that
Defendant’s purchase of the property was subject to Plaintiff’s preserved first-
1 When determining the substance of Nevada law, we may rely on
unpublished Nevada Supreme Court opinions. U.S. Bank, N.A. v. White Horse
Ests. Homeowners Ass’n, 987 F.3d 858, 863 (9th Cir. 2021). That course of action
is especially appropriate here, because Nevada law has long recognized that
“[l]imitations do not run against defenses.” Dredge Corp. v. Wells Cargo, Inc.,
389 P.2d 394, 396 (Nev. 1964).
2 The question whether the statute of limitations affects Plaintiff’s ability to
raise tender as an affirmative defense is a substantive question that we must
evaluate under state law. See Healy Tibbitts Const. Co. v. Ins. Co. of N. Am., 679
F.2d 803, 804 (9th Cir. 1982) (per curiam) (“While state law defines the nature of
the defenses, the Federal Rules of Civil Procedure provide the manner and time in
which defenses are raised and when waiver occurs.”). Here, the nature and validity
of a defense are at issue.
3 Defendant correctly points out that Plaintiff did not set forth its tender
defense in the manner required by Federal Rule of Civil Procedure 8. But
Defendant forfeited its objection by not raising it until filing a Federal Rule of
Appellate Procedure 28(j) letter after briefing in the case already had concluded.
See Sabra v. Maricopa Cnty. Cmty. Coll. Dist., 44 F.4th 867, 881–82 (9th Cir.
2022) (discussing forfeiture).
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position security interest and that judgment should be entered in favor of Plaintiff
on Defendant’s counterclaim.
AFFIRMED.
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