SFR INVESTMENTS POOL 1, LLC; AND STAR HILL HOMEOWNERS ASSOCIATION, Appellants,
THE BANK OF NEW YORK MELLON F/K/A THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS OF THE CWABS, INC., ASSET-BACKED CERTIFICATES, SERIES 2006-6, Respondent.
Certified question, pursuant to NRAP 5, in a quiet title
action. Question answered.
Alverson Taylor Mortensen & Sanders and Kurt R. Bonds and
Adam R. Knecht, Las Vegas, for Appellant Star Hill Homeowners
Gilbert Ebron and Howard Kim, Diana Cline Ebron, and
Jacqueline A. Gilbert, Las Vegas, for Appellant SFR
Investments Pool 1, LLC.
Akerman LLP and Ariel E. Stern, Las Vegas, for Respondent.
Legislative Counsel Bureau Legal Division and Brenda J.
Erdoes, Legislative Counsel, and Kevin C. Powers, Chief
Litigation Counsel, Carson City, for Amicus Curiae Nevada
THE COURT EN BANC.
case comes before us as a certified question from the United
States District Court for the District of Nevada, seeking an
answer to "[w]hether NRS § 116.31168(1)'s
incorporation of NRS § 107.090 required a
homeowner's association to provide notices of default
and/or sale to persons or entities holding a subordinate
interest even when such persons or entities did not request
notice, prior to the amendment that took effect on October 1,
2015." NRS 107.090, which governs trustee sales under a
deed of trust, mandates notice to those holding subordinate
interests. We conclude that, by requiring application of NRS
107.090 during the homeowners' association foreclosure
process, NRS 116-31168(1) required notice to be provided to all
holders of subordinate security interests prior to a
homeowners' association foreclosure sale and thus answer
the question in the affirmative.
AND PROCEDURAL HISTORY
2010, former homeowners became delinquent on their
homeowners' association dues, and appellant Star Hill
Homeowners Association recorded a notice of delinquent
assessments, notice of default, and election to sell in 2010.
Star Hill recorded notices of sale in 2011 and 2012. On
September 14, 2012, Star Hill held the nonjudicial
foreclosure sale pursuant to NRS Chapter 116. It recorded a
foreclosure deed transferring the property to the purchaser,
SBW Investment, Inc. The deed recitals stated that Star Hill
had complied with all statutory notice requirements in
conducting the sale. On April 15, 2013, SBW transferred title
of the property to appellant SFR Investments Pool 1, LLC.
Bank of New York Mellon (BNYM) subsequently filed a complaint
in the federal district court of Nevada, naming SFR and Star
Hill as defendants and requesting a declaration that the
foreclosure sale did not extinguish its deed of trust. BNYM
alleged that the sale was void as violating due process
because NRS Chapter 116 "lacks any pre-deprivation
notice requirements." SFR answered the complaint and
asserted a counterclaim, seeking the opposite declaration and
to quiet title, alleging that BNYM was provided with the
notice of default and sale. The federal district court then
filed in this court its order certifying the question of law
5 permits us to answer the certified question
we address BNYM's argument that we should not answer the
certified question. Existing Nevada precedent does not fully
resolve this legal question, and our answer may determine
part of the underlying federal case. Thus, answering the
question is appropriate. See SFR Invs. Pool 1, LLC v.
Bank of New York Mellon, Docket No. 72931 (Order
Accepting Certified Question, Directing Briefing and
Directing Submission of Filing Fee, June 13, 2017) (citing
NRAP 5(a) and Volvo Cars of N. Am., Inc. v. Ricci,122 Nev. 746, 750-51, 137 P.3d 1161, 1163-64 (2006)).
Although BNYM contends that Bourne Valley Court Trust v.
Wells Fargo Bank, N.A.,832 F.3d 1154 (9th Cir. 2016),
resolved the question, the Ninth Circuit's interpretation
of NRS 116.31168 does not stand in the way of our reaching
the merits of the certified question.See Owen v. United
States,713 F.2d 1461, 1464 (9th Cir. 1983) (providing
that a federal court's construction of a state statute is
only binding in the continued absence of a contrary
construction by that state's highest ...