Bank of America, N.A. v. Four Winds Owners' Association
2:16-cv-00884
| D. Nev. | Aug 7, 2020Background
- Bank of America holds a first deed of trust on 8225 Romantic Sunset Street, Las Vegas. Four Winds Owners’ Association (HOA) conducted a non-judicial foreclosure sale on November 30, 2012; Premier One bought the property and later transferred it to TPZ Lu, Ltd. (TPZ).
- The HOA used Nevada Association Services, Inc. (NAS) as its foreclosure agent; notices directed interested parties to contact NAS.
- In March 2012 Bank’s counsel (Miles Bauer) sent NAS a letter requesting the HOA’s superpriority payoff and offering to pay that amount; NAS did not respond.
- Evidence showed NAS had a known practice of rejecting conditional checks from Miles Bauer during the relevant period.
- The court applied Nevada Supreme Court precedent holding that where an HOA’s agent has a known policy of rejecting conditional tenders, the lender is excused from formal tender and its interest is preserved.
- Holding: Bank was excused from tender; the HOA sale did not extinguish the deed of trust, Bank’s summary judgment granted, TPZ’s denied, and Bank’s alternative damages claims dismissed as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Bank excused from tendering the superpriority amount? | Bank sent an offer to NAS and NAS’s known policy of rejecting conditional payments excused formal tender. | TPZ argued Bank was not excused and could have cured by paying the HOA directly. | Bank excused: NAS’s known rejection policy meant tender would have been futile; excuse preserves Bank’s interest. |
| Did the HOA foreclosure sale extinguish Bank’s deed of trust? | Because the superpriority default was cured (or tender excused), the sale is void as to the deed. | TPZ argued it purchased as a bona fide purchaser and thus took free title. | Sale did not extinguish the deed; TPZ holds title subject to Bank’s deed; BFP status irrelevant where sale is void. |
| Should Bank have contacted the HOA directly instead of NAS? | Bank reasonably followed the foreclosure notices that identified NAS as the HOA’s foreclosure agent. | TPZ contended Bank should have ignored the notices and contacted Four Winds. | Court rejected TPZ: Bank properly dealt with the designated agent; no authority required contacting HOA directly. |
| What is the disposition of other claims and cross-motions? | If deed survives, Bank’s damages claims are moot; Bank sought summary judgment on declaratory relief. | TPZ sought summary judgment extinguishing the deed; Four Winds moved for summary judgment. | Bank’s declaratory judgment granted; TPZ’s summary judgment denied; Bank’s damages claims dismissed as moot; Four Winds’ motion denied as moot. |
Key Cases Cited
- 7510 Perla Del Mar Ave Trust v. Bank of Am., N.A., 458 P.3d 348 (Nev. 2020) (excuse of tender where foreclosure agent had known policy to reject conditional payments preserves lender’s interest)
- Bank of Am., N.A. v. SFR Invs. Pool 1, LLC, 427 P.3d 113 (Nev. 2018) (valid tender cures superpriority default and a sale is void as to the superpriority portion)
- Fraser v. Goodale, 342 F.3d 1032 (9th Cir. 2003) (at summary judgment courts may consider the admissibility of evidence’s contents even if form is not trial-admissible)
- Vasquez v. Rackauckas, 734 F.3d 1025 (9th Cir. 2013) (arguments raised for the first time in a reply brief may be disregarded)