Bank of America, N.A. v. Twilight Homeowners Assoc.
20-15713
| 9th Cir. | Mar 17, 2022Background
- BANA (Bank of America) sued to quiet title after Twilight Homeowners Association conducted a nonjudicial foreclosure sale on property subject to BANA’s deed of trust. Daly Property Management (Daly) was also a defendant and suffered a default judgment prior to summary judgment.
- The district court granted summary judgment for Twilight, holding BANA’s deed of trust did not survive the HOA foreclosure; BANA appealed that ruling.
- Daly moved under Rule 60(b) to set aside the default judgment entered against it; the district court denied that motion and Daly appealed that denial.
- Key factual dispute: BANA made a tender (payment) intended to satisfy the HOA’s superpriority lien before the sale; Twilight rejected the tender but did not state any contemporaneous reason or objection to the amount.
- The Ninth Circuit considered whether Twilight waived objections to the tender by failing to object at the time, whether the default against Daly or law-of-the-case/mootness barred reconsideration, and whether the district court abused its discretion in denying Daly’s Rule 60(b) motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a default judgment against Daly or law-of-the-case/mootness barred later adjudication of BANA’s quiet-title claim | BANA: Default against Daly does not preclude adjudication of claims against other defendants; Rule 54(b) allows revision while action continues | Twilight: Default/previous rulings should preclude further relitigation (mootness/law-of-the-case) | Rejected: Rule 54(b) and caselaw permit reassessment; default did not moot the live controversy |
| Whether Twilight waived objections to BANA’s tender by failing to specify objections at the time of tender | BANA: Twilight refused to explain rejection and failed to specify objections, so it waived any defect; tender was sufficient | Twilight: Tender was insufficient/conditional and could be rejected later (including as to amount or negotiability) | Held for BANA: Twilight waived objections by not asserting them at the time; tender preserved BANA’s interest and the deed of trust survived the foreclosure |
| Whether Nevada law would treat failure to object at time of tender as waiver of objection to amount | BANA: Nevada would follow Milner and other jurisdictions holding form/amount objections must be raised at tender | Twilight: Nevada Supreme Court has not squarely decided and could decline to adopt that rule | Court predicted Nevada would apply waiver to amount objections based on Milner and persuasive out-of-state authority |
| Whether the district court abused its discretion in denying Daly’s Rule 60(b) motion to vacate default | Daly: Personal hardships and meritorious defenses warranted setting aside default | BANA/District Court: Daly’s culpable conduct caused the default; setting aside would be prejudicial; no good cause | Affirmed: District court did not abuse discretion; culpability supported denial, so default stands |
Key Cases Cited
- Fed. Home Loan Mortg. Corp. v. SFR Invs. Pool 1, LLC, 893 F.3d 1136 (9th Cir. 2018) (standard of review for summary judgment in related title disputes)
- Askins v. U.S. Dep’t of Homeland Sec., 899 F.3d 1035 (9th Cir. 2018) (law-of-the-case doctrine does not bar reassessing rulings in the same case)
- Milner v. Dudrey, 362 P.2d 439 (Nev. 1961) (Nevada case holding objections to the form of a tender must be made at the time)
- First Sec. Bank of Utah, N.A. v. Maxwell, 659 P.2d 1078 (Utah 1983) (authority adopting waiver rule that tender objections must be specified at the time)
- Am. Ass’n of Naturopathic Physicians v. Hayhurst, 227 F.3d 1104 (9th Cir. 2000) (standards for vacating default judgments)
- Brandt v. Am. Bankers Ins. Co. of Fla., 653 F.3d 1108 (9th Cir. 2011) (district court may deny relief to defaulting defendant based solely on culpability)