HSBC Bank USA, N.A. v. Green Valley Pecos Homeowners Association, Inc.
2:16-cv-00242
D. Nev.Mar 19, 2021Background
- The subject property (2614 White Pine Dr., Henderson, NV) was refinanced in 2007 with a $449,000 loan secured by a deed of trust later assigned to BANA and then HSBC.
- The HOA (via Absolute Collections Services, ACS) recorded a delinquent assessment lien and later notices of default and sale in 2011–2012; ACS foreclosed in Sept. 2012 and sold the property to Mike Short for $5,900.
- BANA (through counsel) repeatedly sought the superpriority payoff amount and attempted to tender payment, but ACS either refused to provide accounting or rejected tenders, citing practice of refusing checks with conditional language or asserting superpriority only attached after a deed-of-trust foreclosure.
- HSBC (as trustee) filed this quiet-title action in Feb. 2016 seeking a declaration that its deed of trust survived the HOA sale; Short counterclaimed. The district court initially entered judgment for Short, the Ninth Circuit reversed and remanded in 2019 for further fact development.
- On remand both parties filed cross-motions for summary judgment; the court held HSBC’s claim was timely and that formal tender was excused as futile, granted HSBC’s motion, denied Short’s, declared the deed of trust survived the HOA sale, and dismissed remaining claims as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of quiet-title claim | Claim is timely under 5-year limitations (NRS § 11.070); not governed by 3-year statute for statutory liabilities | Claim barred by 3-year limitations under NRS 11.190(3)(a) | Court: 5-year period governs quiet-title claims; HSBC timely filed |
| Whether formal tender was required | Tender was futile because ACS had a known practice/policy of rejecting tenders (e.g., conditional checks or "paid in full") | BANA only made offers, never completed valid tender; therefore tender not excused | Court: Tender excused under futility doctrine (Perla Trust); no genuine dispute on futility |
| Effect of ACS conduct on superpriority payoff | ACS’s rejections and refusal to provide accounting prevented meaningful tender | Short argues rejection not proven or tenders insufficient | Court: ACS’s conduct (rejections/conditions) established known policy of rejection; futility established |
| Short’s status as bona fide purchaser | N/A (HSBC seeks declaration deed survived) | Short contends bona fide purchaser status protects his title | Court: BFP defense irrelevant because deed of trust survived under futility; Short’s MSJ denied |
Key Cases Cited
- Perla Trust v. Bank of America, 458 P.3d 348 (Nev. 2020) (excuses formal tender where payee has known policy of rejecting payments)
- Shadow Wood HOA v. New York Community Bancorp., 366 P.3d 1105 (Nev. 2016) (quiet-title claims exist within courts’ equitable jurisdiction and NRS 40.010 codifies that equity principle)
- Weeping Hollow Ave. Trust v. Spencer, 831 F.3d 1110 (9th Cir. 2016) (quiet-title challenges to HOA foreclosure sales are governed by a five-year limitations period)
- Bank of America v. SFR Investments Pool 1, LLC, 427 P.3d 113 (Nev. 2018) (lender may insist on conditional tender and circumstances may excuse formal tender)