Bank of America v. Arlington West Twilight Hoa
920 F.3d 620
| 9th Cir. | 2019Background
- Property in Las Vegas secured by an FHA-insured mortgage later assigned to Bank of America; located in a subdivision governed by Arlington West Twilight HOA.
- Owners fell behind on HOA dues; Arlington West recorded delinquent-assessment and default notices and initiated nonjudicial foreclosure through trustee Alessi & Koenig.
- Bank of America requested the HOA identify the superpriority portion of its lien so the bank could tender payment to preserve its first deed of trust; HOA produced only a ledger showing total arrears.
- Bank calculated nine months of dues ($423) from the ledger (no maintenance/nuisance charges shown) and tendered $423; HOA rejected the tender and completed the foreclosure sale to Thomas Jessup, LLC (later Series IV).
- Bank sued for quiet title and other claims; district court granted summary judgment to defendants on quiet title. Ninth Circuit reversed, relying on Nevada Supreme Court authority resolving tender sufficiency and rejecting related constitutional and preemption challenges.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bank's tender satisfied HOA superpriority lien | Tender of nine months' dues ($423) satisfied superpriority portion shown on HOA ledger | Tender was insufficient; HOA believed superpriority exceeded nine months/other charges | Held: Tender was sufficient; HOA had no good-faith basis to reject it (per Nevada Supreme Court controlling interpretation) |
| Whether Nev. Rev. Stat. §116.3116 notice scheme violates Due Process (opt-in) | Statute is facially unconstitutional under Bourne Valley (impermissible opt-in) | Statute meets notice requirements; Bank received actual notice here | Held: Bourne Valley interpretation displaced by Nevada Supreme Court (SFR v. BNYM); statute is not facially unconstitutional and Bank received actual notice |
| Whether state HOA lien statute is preempted by FHA/mortgage-insurance program | FHA program preempts state law because it undermines federal goals/protections | No conflict; paying superpriority preserves lender/HUD interests and HUD has advised this approach | Held: No preemption; follows Nevada Supreme Court (Renfroe) and HUD guidance |
| Whether Bank can quiet title by establishing tender satisfied superpriority | Bank can establish superiority by showing valid tender of superpriority amount | Quiet title fails because tender insufficient or improperly rejected | Held: Bank entitled to quiet title because tender satisfied superpriority and condition of acceptance extinguished HOA’s superpriority lien |
Key Cases Cited
- SFR Invs. Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014) (establishes Nevada HOA superpriority lien framework)
- Bank of Am., N.A. v. SFR Invs. Pool 1, LLC, 427 P.3d 113 (Nev. 2018) (tender of nine months' dues satisfies superpriority where no other superpriority charges appear)
- Bourne Valley Court Tr. v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016) (earlier panel held statute facially unconstitutional under opt-in notice theory)
- SFR Invs. Pool 1, LLC v. Bank of N.Y. Mellon, 422 P.3d 1248 (Nev. 2018) (clarifies that statute incorporates mandatory notice provisions, overruling Bourne Valley’s interpretation)
- Renfroe v. Lakeview Loan Servicing, LLC, 398 P.3d 904 (Nev. 2017) (Nevada Supreme Court holds state HOA lien statute not preempted by federal mortgage-insurance program)