Bank of Am., N.A. v. Thomas Jessup, LLC
435 P.3d 1217
Nev.2019Background
- Property subject to an HOA (Foxfield) lien; homeowner defaulted on assessments.
- Bank of New York Mellon (serviced by Bank of America; represented by Miles Bauer) held the first deed of trust on the property.
- HOA agent Absolute Collection Services (ACS) recorded notices and later sold the property at an HOA foreclosure sale; purchaser later quiet-titled the property.
- Miles Bauer sent a letter offering to pay the HOA’s superpriority amount "upon presentation of adequate proof" once the amount was determined (i.e., an offer to pay in the future).
- ACS replied that a 9‑month superpriority statement was not valid until ACS saw evidence of foreclosure by the Bank and indicated it would reject a tender accompanied by a "paid in full" condition.
- District court held the HOA sale extinguished the Bank’s deed of trust; Bank appealed.
Issues
| Issue | Bank's Argument | Purchaser/ACS Argument | Held |
|---|---|---|---|
| Whether an offer to pay the yet‑to‑be‑determined superpriority amount in the future constitutes a valid tender that preserves a first deed of trust | Miles Bauer: its letter offering to pay the superpriority amount once ascertained was a sufficient tender to preserve the deed of trust | Purchaser: a promise to pay later is not an actual tender; tender requires present ability to pay | Held: Offer to pay in the future is not a valid tender — mere promise is insufficient |
| Whether a formal tender is excused where the party entitled to payment indicates it will refuse acceptance | Bank: ACS’s communications effectively told Miles Bauer a tender would be rejected, excusing the need for formal payment | Purchaser/ACS: disputed or did not concede that their statements excused tender | Held: Where the payee (ACS) indicated it would refuse a tender, formal tender was excused; combined with Miles Bauer’s offer, the tender requirement was satisfied and the HOA sale did not extinguish the deed of trust |
Key Cases Cited
- SFR Invs. Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014) (HOA’s NRS 116.3116(2) superpriority lien can extinguish a first deed of trust when properly foreclosed)
- Bank of Am., N.A. v. SFR Invs. Pool 1, LLC, 427 P.3d 113 (Nev. 2018) (a deed of trust beneficiary can preserve its deed by tendering the superpriority portion before the HOA sale)
- Guthrie v. Curnutt, 417 F.2d 764 (10th Cir. 1969) (payment offer may be treated as tender where the payee refuses to accept payment)
- Southfork Invs. Grp., Inc. v. Williams, 706 So.2d 75 (Fla. Dist. Ct. App. 1998) (general rule: an effective tender requires present ability to pay; mere offers are insufficient)