from a district court order granting a motion to dismiss in a
quiet title action. Eighth Judicial District Court, Clark
County; Ronald J. Israel, Judge.
Gilbert Ebron and Jacqueline A. Gilbert, Las Vegas; Law
Offices of Michael F. Bohn, Esq., Ltd., and Michael F. Bohn,
Las Vegas, for Appellant.
& Wilmer, LLP, and Andrew M. Jacobs and Kelly H, Dove,
Las Vegas, for Respondent.
116.3116-.31168 grant a homeowners' association (HOA)
a superpriority lien for certain unpaid assessments and allow
an HOA to nonjudicially foreclose on such a lien if specific
requirements are met. In this appeal, we must determine
whether these statutes violate a first security interest
holder's due process rights. We hold that neither the
HOA's nonjudicial foreclosure, nor the Legislature's
enactment of the statutes, constitute state action.
Therefore, the statutes do not implicate due process.
Additionally, we consider whether the extinguishment of a
subordinate deed of trust through an HOA's nonjudicial
foreclosure violates the Takings Clauses of the United States
and Nevada Constitutions. We hold it does not, and we
therefore reverse the district court's order and remand
for further proceedings consistent with this opinion.
AND PROCEDURAL HISTORY
to this appeal Roy and Shirley Senholtz took out an $81, 370
loan from respondent Wells Fargo Home Mortgage, a division of
Wells Fargo Bank, N.A. (Wells Fargo) in order to refinance
their mortgage on property located in Summerlin, Nevada.
Wells Fargo's loan was secured by a deed of trust on the
property, and the property was governed by an HOA's
covenants, conditions, and restrictions (CC&Rs). The
Senholtzes subsequently failed to pay their HOA dues and
mortgage, and both Wells Fargo and the HOA recorded notices
of default and election to sell. Thereafter, the HOA
conducted a nonjudicial foreclosure sale, wherein the
property was sold to appellant Saticoy Bay LLC Series 350
Durango 104 (Saticoy Bay) for $6, 900.
Bay filed a complaint seeking an injunction preventing Wells
Fargo from foreclosing on the property and a declaration that
it was the rightful owner of the property, free and clear
from any encumbrances or liens. Wells Fargo filed a motion to
dismiss, arguing (1) NRS 116.3116 et seq. violate
the Due Process Clause and the Takings Clause of both the
United States and Nevada Constitutions; (2) this court's
interpretation of NRS 116.3116 et seq. in SFR
Investments Pool 1, LLC v. US. Bank, N.A., 130 Nev.,
Adv. Op. 75, 334 P.3d 408 (2014), conflicts with public
policy; and (3) the purchase price of the property was
commercially unreasonable. The district court held that the
statutes violated Wells Fargo's due process rights and
granted the motion; the district court did not address Wells
Fargo's other arguments. Saticoy Bay now appeals the
district court's order.
appeal, Saticoy Bay argues the foreclosure statutes do not
violate a first security interest holder's due process
rights. We also consider Wells Fargo's argument that the
foreclosure statutes violate the Takings Clauses of the
United States and Nevada Constitutions. See Tarn v.
Eighth Judicial Dist Court, 131 Nev., Adv. Op. 80, 358
P.3d 234, 238-39 (2015) ("Although this court would not
normally address an issue that the district court declined to
consider and develop the factual record, this court can
consider constitutional issues for the first time on
appeal."). We review the district court's legal
conclusions, such as the constitutionality of a statute, de
novo. Buzz Stew, LLC v. City of N. Las Vegas, 124
Nev. 224, 228, 181 P.3d 670, 672 (2008); Silvar v. Eighth
Judicial Dist. Court, 122 Nev. 289, 292, 129 F.3d 682,
superpriority lien statutes do not violate a first security
interest holder's due process rights
Fargo argues that the foreclosure procedures specified in NRS
116.3116 et seq. are facially unconstitutional
because they do not require an HOA to give a first security
interest holder actual notice of a foreclosure that, once
conducted, may extinguish the security interest. Cf. SFR
Investments Pool 1, 130 Nev., Adv. Op. 75, 334 P.3d at
419 ("NRS 116.3116(2) gives an HOA a true superpriority
lien, proper foreclosure of which will extinguish a first
deed of trust."). Saticoy Bay argues that an HOA's
nonjudicial foreclosure does not violate due process because
(1) no state actor participates in an HOA's nonjudicial
foreclosure, and (2) NRS 116.31168 incorporates the notice
requirements set forth in NRS 107.090.
Process Clauses of the United States and Nevada Constitutions
protect individuals from state actions that deprive them of
life, liberty, or property without due process of law. U.S.
Const, amend. XIV, § 1; Nev. Const, art. 1, § 8(5);
see also Lugar v. Edmondson Oil Co.,457 U.S. 922,
936 (1982). The United States Supreme Court has provided a
two-part test for determining whether the deprivation of a
property interest is the result of state action. See
Lugar, 457 U.S. at 937. First, it must be determined
whether "the deprivation [was] caused by the exercise of
some right or privilege created by the State."