Vern Elmer v. Jp Morgan Chase Bank
707 F. App'x 426
| 9th Cir. | 2017Background
- Vern Elmer purchased a property at an HOA foreclosure sale in November 2012; Freddie Mac later asserted its deed of trust interest had not been extinguished.
- Freddie Mac was under the Federal Housing Finance Agency (FHFA or the Agency) conservatorship at the time; FHFA intervened to protect Freddie Mac's interests.
- District court granted summary judgment for Freddie Mac and FHFA, concluding the Federal Foreclosure Bar, 12 U.S.C. § 4617(j)(3), preempted Nevada's statute NRS § 116.3116 to the extent it would allow HOA superpriority foreclosures to extinguish Freddie Mac's interest without the Agency's consent.
- Freddie Mac submitted internal database records and an employee declaration showing it owned the loan since October 24, 2005 (before the HOA sale); Elmer offered no contrary evidence.
- Elmer argued Freddie Mac's interest was unenforceable because it failed to record properly and that MERS held the interest in trust; the court rejected these contentions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Federal Foreclosure Bar preempts Nevada law allowing HOA superpriority sales to extinguish Freddie Mac's deed of trust | Elmer: Nevada law extinguished Freddie Mac's interest via the HOA sale | Freddie Mac/FHFA: 12 U.S.C. § 4617(j)(3) preempts Nevada statute to the extent it would extinguish interests without Agency consent while Freddie Mac is in conservatorship | Preemption applies; HOA sale did not extinguish Freddie Mac's interest |
| Whether Freddie Mac had an interest in the loan at the time of the HOA sale | Elmer: Freddie Mac did not prove it owned the loan; records ambiguous | Freddie Mac: internal records and employee declaration show ownership since 2005 | Freddie Mac provided reliable, uncontroverted evidence; no genuine dispute of material fact |
| Whether Freddie Mac's interest was unenforceable for failure to record correctly | Elmer: recorded documents omitted Freddie Mac's name, so interest unenforceable | Freddie Mac: Nevada law recognizes enforceable interest if recorded beneficiary acted on Freddie Mac's behalf | Court held interest enforceable despite recording omission (consistent with Berezovsky) |
| Whether the Agency could succeed to Freddie Mac's interest when MERS held the mortgage in trust; and whether FHFA has standing | Amicus (CAI): trust holding means asset not Freddie Mac's; Agency lacks standing | FHFA: as conservator FHFA succeeds to Freddie Mac's rights; statutory language allows succession | Court rejected CAI's argument and held FHFA has standing to assert preemption; trust argument fails on statutory reading |
Key Cases Cited
- Arizona v. United States, 567 U.S. 387 (2012) (federal preemption principles)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (summary judgment and the need for specific opposing evidence)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requirements)
- Ariz. Dream Act Coal. v. Brewer, 757 F.3d 1053 (9th Cir. 2014) (discussion of federal preemption and federal-state conflicts)
- United States v. Gementera, 379 F.3d 596 (9th Cir. 2004) (amicus cannot raise new arguments on appeal)