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Saticoy Bay LLC Series 9050 W Warm Springs 2079 v. Nevada Association Services

Supreme Court of Nevada

July 3, 2019


          Appeal from a final judgment in an action to quiet title to real property. Eighth Judicial District Court, Clark County; Timothy C. Williams, Judge.

          Law Offices of Michael F. Bohn, Ltd., and Michael F. Bohn, Henderson, for Appellant.

          Law Office of John W. Thomson and John W. Thomson, Henderson; Messner Reeves LLP and Brigette E. Foley, Las Vegas, for Respondent James P. Markey.

          Wolfe & Wyman LLP and Colt B. Dodrill, Las Vegas, for Respondent Ditech Financial LLC. Christopher V. Yergensen, Las Vegas, for Respondent Nevada Association Services.



          STIGLICH, J.

         In SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 130 Nev. 742, 334 P.3d 408 (2014), this court held that NRS 116.3116(2) (2013) provided a homeowners' association (HOA) with a "superpriority" lien that, when properly foreclosed, extinguished a first deed of trust and vested title in the foreclosure sale purchaser "without equity or right of redemption," NRS 116.31166(3) (1993). In the wake of SFR Investments, Nevada's Legislature enacted substantial amendments to NRS Chapter 116's HOA foreclosure sale statutes, in part, by creating a statutory right for homeowners, holders of a recorded security interest, and successors in interest to redeem property within a 60-day time frame after such a sale. We are asked to consider for the first time the application of this amendment. Because we conclude that the homeowner in this matter complied with the redemption statute at issue, we affirm the district court's grant of summary judgment in favor of the homeowner.


         Appellant Saticoy Bay LLC Series 9050 W Warm Springs 2079 purchased property owned by respondent James Markey for $48, 600 at an HOA foreclosure sale in November 2015. After the foreclosure sale, Nevada Association Services (NAS), the entity that conducted the sale, distributed $4, 564.23 of sale proceeds to pay off the HOA lien and satisfy costs associated with the sale. It then held the remaining proceeds of the sale in its trust account. Within 60 days of the foreclosure sale, Markey notified NAS that he intended to redeem the property pursuant to Nevada's newly enacted HOA foreclosure sale redemption statute, NRS 116.31166(3) (2015).[1] NAS in turn notified Saticoy Bay of Markers intent to redeem, but neither NAS nor Markey provided Saticoy Bay with a certified copy of the deed on the property.

         NAS provided Markey with the figures that encompassed the redemption amount. Pursuant to NRS 116.31166(3), the redemption amount is calculated as the sum of (1) the purchase price of the property at the foreclosure sale, (2) the HOA lien and costs, [2] (3) reimbursement for reasonable maintenance costs, and (4) statutory interest accumulated from the date of the HOA foreclosure sale to the date of redemption. NAS informed Markey that it would direct the remaining proceeds of the sale it held in trust toward the full redemption amount and instructed Markey to supply the remainder. Further, NAS informed Markey that as soon as he sent the remainder of the redemption amount, NAS would return to Saticoy Bay the proceeds of the sale held in trust along with the remainder of the redemption amount from Markey (together, the full redemption amount).

         Markey sent the remainder of the redemption amount to NAS, and NAS sent a check to Saticoy Bay for the full redemption amount. Saticoy Bay, however, refused the check because it believed that the money had to come directly from Markey, not NAS, and because Markey could not use proceeds from the sale to redeem the property. NAS sent another check, this time in Markey's name, to Saticoy Bay on the last day of the redemption period, but Saticoy Bay again rejected it. Respondent Ditech Financial LLC-the bank servicing the mortgage on Markey's property-also expressed interest in redeeming the property prior to Markey's notice. However, when Ditech learned of Markey's intent to redeem, it abandoned those efforts. Ditech later memorialized that position when it notified NAS that to the extent Ditech had any interest in the proceeds of the sale NAS held in its trust account, Ditech authorized Markey to use those funds to redeem the property. When Saticoy Bay sought a foreclosure deed[3] for the property, NAS refused, arguing that Markey's redemption was successful and that the foreclosure sale was terminated.

         Saticoy Bay filed a complaint in the district court seeking quiet title to the property, declaratory relief, and specific performance. Ditech moved for summary judgment, which Markey joined, arguing that the plain language of NRS 116.31166(3) and (4) did not prevent unit owners from using the proceeds of an HOA foreclosure sale to exercise their redemption rights, and that it was "immaterial" that Markey did not provide a certified copy of his deed when he sought redemption. Saticoy Bay opposed and countermoved for summary judgment, arguing that Markey failed to comply with NRS 116.31166(3) because the checks came from NAS and not Markey directly, that NAS and Markey failed to comply with NRS 116.31164(7)(b), and that NRS 116.31166(4) mandated strict compliance. The district court concluded that NAS's "tender to Saticoy Bay of the full redemption amount of $50, 052.16 via cashier's check on behalf of Markey immediately extinguished Saticoy Bay's interest in the property." It also found that "the amount, time, and manner of the tender was sufficient" to satisfy the redemption statute. Consequently, the district court granted summary judgment to Ditech and Markey, terminated the foreclosure sale, and quieted title in favor of Markey subject to Ditech's first deed of trust.

         Saticoy Bay appeals from the order granting summary judgment and raises two primary arguments: (1) Markey did not comply with the HOA foreclosure sale redemption statute when he directed NAS to put the proceeds of the foreclosure sale toward redemption of the property, and (2) Markey did not comply with the notice provision of the redemption statute when he failed to produce a certified copy of the deed with his notice to redeem. Saticoy Bay argues that this failure to comply with the statutory requirements renders the redemption invalid, and therefore, the district court erred in granting summary judgment to Ditech and Markey.


         Generally, "[t]his court reviews a district court's grant of summary judgment de novo, without deference to the findings of the lower court." Wood v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026, 1029 (2005). Pursuant to NRCP 56(c), summary judgment is proper when no genuine issue of material fact remains and the movant "is entitled to a judgment as a matter of law." Id. (internal quotation omitted). And this court views the evidence in a light most favorable to the nonmoving party. Id. Further, issues of statutory construction are reviewed de novo. Leven v. Frey, 123 Nev. 399, 402, 168 P.3d 712, 714 (2007). "Similarly, whether a statute's procedural requirements must be complied with strictly or only substantially is a question of law subject to [this court's] plenary review." Id.

         Markey complied with the HOA ...

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