Saticoy Bay LLC v. Fed. Nat'l Mortg. Ass'n
417 P.3d 363
| Nev. | 2018Background
- In 2008 the FHFA placed Fannie Mae into conservatorship under HERA; as conservator FHFA "succeeds to...the assets" of the regulated entity and 12 U.S.C. § 4617(j)(3) bars nonconsensual foreclosure of FHFA property.
- Don and Rieta Moreno took a mortgage secured by a deed of trust later assigned to Fannie Mae; the Morenos defaulted on HOA dues.
- Saticoy Bay purchased the property at an HOA foreclosure sale under Nevada’s NRS 116.3116 (the HOA’s "superpriority" lien) and then sued to quiet title against Fannie Mae.
- The district court granted summary judgment for Fannie Mae, holding the Federal Foreclosure Bar preempted NRS 116.3116 and the FHFA had not consented to extinguishment, so the deed of trust survived.
- Saticoy Bay appealed; the Nevada Supreme Court reviews standing, preemption, and summary judgment de novo and affirms the district court.
Issues
| Issue | Plaintiff's Argument (Saticoy Bay) | Defendant's Argument (Fannie Mae) | Held |
|---|---|---|---|
| Standing to assert Fed. Foreclosure Bar | HERA protects only FHFA and FHFA is not a party, so Fannie Mae lacks standing | A regulated entity whose property interest is at stake may invoke the Federal Foreclosure Bar; private parties often assert federal statutory protections in private suits | Fannie Mae has standing to invoke the Federal Foreclosure Bar |
| Whether § 4617(j)(3) expressly preempts NRS 116.3116 | Foreclosure-bar protects only against taxation or not broad enough to preempt HOA foreclosure rule | § 4617(j)(3) bars foreclosure of FHFA property without consent; HERA gives FHFA control of regulated-entity assets during conservatorship | No express preemption, but statute’s plain language protects property from foreclosure |
| Whether § 4617(j)(3) implicitly (conflict) preempts NRS 116.3116 | NRS 116.3116 creates a superpriority lien that can extinguish first deeds of trust and thus is valid state law | NRS 116.3116 conflicts with Congress’s clear purpose to protect conservatorship assets; imposing state extinguishment frustrates federal objectives | Federal Foreclosure Bar implicitly preempts NRS 116.3116 to the extent it extinguishes a deed of trust while FHFA is conservator |
| Whether FHFA consented (implicitly) to extinguishment | FHFA’s inaction equals consent; sale should extinguish deed under Nevada law | FHFA must affirmatively relinquish property; silence is not consent under the Federal Foreclosure Bar | FHFA did not consent; foreclosure did not extinguish Fannie Mae’s deed of trust |
Key Cases Cited
- D.R. Horton, Inc. v. Eighth Judicial Dist. Court, 168 P.3d 731 (Nev. 2007) (plain-meaning statutory interpretation)
- Nanopierce Techs., Inc. v. Depository Tr. & Clearing Corp., 168 P.3d 73 (Nev. 2007) (framework for implied preemption/conflict analysis)
- Berezovsky v. Moniz, 869 F.3d 923 (9th Cir. 2017) (Federal Foreclosure Bar protects FHFA property from foreclosure and does not require affirmative resistance)
- Shadow Wood HOA v. N.Y. Cmty. Bancorp., 366 P.3d 1105 (Nev. 2016) (standards for setting aside foreclosure sale—requires fraud, unfairness, or oppression beyond inadequate price)
- Davidson v. Velsicol Chem. Corp., 834 P.2d 931 (Nev. 1992) (Congressional silence disfavors finding express preemption)
- Saticoy Bay LLC Series 350 Durango 104 v. Wells Fargo Home Mortg., 388 P.3d 970 (Nev. 2017) (addresses due-process challenges to NRS 116.3116)