Citimortgage, Inc. v. Corte Madera Homeowners Ass'n. ( 2020 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CITIMORTGAGE, INC., No. 17-16404
Plaintiff-Counter-Defendant-
Appellant, D.C. No.
2:16-cv-00398-
v. JCM-GWF
CORTE MADERA HOMEOWNERS
ASSOCIATION; SUSAN PATCHEN; OPINION
EAGLE AND THE CROSS, LLC;
NEVADA ASSOCIATION SERVICES,
INC.,
Defendants-Counter-Claimants-
Appellees.
Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding
Argued and Submitted November 13, 2019
Submission Vacated January 21, 2020
Resubmitted June 12, 2020
Pasadena, California
Filed June 19, 2020
Before: Susan P. Graber, Marsha S. Berzon,
and Morgan Christen, Circuit Judges.
Opinion by Judge Christen
2 CITIMORTGAGE V. CORTE MADERA HOA
SUMMARY*
Nevada Foreclosure Law
The panel affirmed in part, and reversed in part, the
district court’s judgment in an action brought by
CitiMortgage, Inc. (“Citi”) against a Nevada homeowners
association (“HOA”) for wrongful foreclosure, breach of the
statutory duty of good faith required by Nev. Rev. Stat.
116.1113, and quiet title.
Nev. Rev. Stat. § 116.3116(1) allows HOAs to pursue
liens on members’ homes for unpaid assessments and
charges. HOA liens are split into superpriority and
subpriority components. The superpriority component is
prior to all other liens, including first deeds of trust; and it
comprises nine months’ worth of common assessments and
any nuisance-abatement or maintenance charges. An HOA
may foreclose on its superpriority lien through a non-judicial
foreclosure sale.
Citi argued that the HOA’s non-judicial foreclosure sale
did not extinguish its interest because Citi’s predecessor,
Bank of America, N.A. (“BANA”), tendered the superpriority
portion of the lien to the HOA. The panel rejected Citi’s
request to remand the appeal to the district court in light of
intervening case law in 7510 Perla Del Mar Ave Tr. v. Bank
of America, N.A., 458 P.3d 348, 350-51 (Nev. 2020) (en banc)
(holding that a mere offer to pay at a later time, after the
superpriority amount was determined, does not constitute a
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
CITIMORTGAGE V. CORTE MADERA HOA 3
valid tender), because Perla Del Mar did not alter the validity
of Citi’s tender where in this case BANA insisted on the same
condition that Perla Del Mar prohibited. The panel held that
the district court did not err when it concluded that Citi was
obligated to satisfy the superpriority portion of the lien in
order to protect its interest. The panel further held that the
district court did not err by observing that Citi’s offer to pay
nine months’ assessments was not the equivalent of an offer
to pay the superpriority of the HOA’s lien; and in light of
Perla Del Mar, the district court did not err by ruling that
Citi’s tender was impermissibly conditional. The panel
declined to consider Citi’s unpreserved futility-of-tender
argument, raised for the first time on appeal, or to remand for
further factual development.
Citi’s complaint alleged that the HOA foreclosure sale
violated the automatic bankruptcy stay that arose pursuant to
11 U.S.C. § 362(a) when the homeowner filed her bankruptcy
petition. The panel remanded for the district court to consider
whether the property was property of the debtor or of the
bankruptcy estate, to determine whether the notices violated
the bankruptcy stay, and to address whether Citi has standing
to challenge the alleged violation.
In a separately filed memorandum disposition, the panel
affirmed the district court’s denial of Citi’s due process
challenge and the denial of Citi’s argument that the sale
should be aside due to an inadequate sale price.
4 CITIMORTGAGE V. CORTE MADERA HOA
COUNSEL
Darren T. Brenner (argued), Ariel E. Stern, Scott R.
Lachman, and Thera Cooper, Akerman LLP, Las Vegas,
Nevada, for Plaintiff-Counter-Defendant-Appellant.
Michael N. Beede and James W. Fox, The Law Office of
Mike Beede PLLC, Henderson, Nevada, for Defendants-
Counter-Claimants-Appellees.
OPINION
CHRISTEN, Circuit Judge:
In 2014, Corte Madera Homeowners Association
conducted a non-judicial foreclosure sale in Las Vegas,
Nevada to enforce a lien representing delinquent amounts
owed by one of its homeowner members, Kathy Horton.
CitiMortgage’s (“Citi”) first deed of trust on the property was
extinguished in the foreclosure by operation of section
116.3116 of the Nevada Revised Statutes, which gave
superpriority status to a portion of Corte Madera’s lien.
Citi sued Corte Madera for wrongful foreclosure, breach
of the statutory duty of good faith required by section
116.3113 of the Nevada Revised Statutes, and quiet title.
The district court granted summary judgment in favor of
defendants on all of Citi’s claims, and sua sponte rejected the
allegation in Citi’s complaint that Corte Madera’s foreclosure
notices violated the automatic stay imposed in Horton’s
bankruptcy proceeding. Citi appeals the dismissal of its quiet
title claim. We have jurisdiction pursuant to 28 U.S.C.
CITIMORTGAGE V. CORTE MADERA HOA 5
§ 1291. In a separately filed memorandum disposition, we
affirm the district court’s denial of Citi’s due process
challenge and the denial of Citi’s argument that the sale
should be set aside due to an inadequate sale price. In this
opinion, we affirm the district court’s ruling regarding the
adequacy of the lender’s tender, but we remand for
reconsideration of the complaint’s allegation that Corte
Madera’s foreclosure notices violated the homeowner’s
bankruptcy stay.
BACKGROUND
Kathy Horton owned real property located at 2517
Danborough Court, Unit 106, Las Vegas, Nevada. In 2006,
Horton refinanced the property with a $120,100.00 loan
secured by a deed of trust. The deed of trust was reassigned
to Bank of America Home Loans (later Bank of America,
N.A.; hereinafter BANA) and recorded in December 2009.
BANA later reassigned the deed to Citi.
Horton fell behind in the assessments she owed to Corte
Madera. She filed a chapter 7 bankruptcy proceeding on
February 29, 2012. On July 2, 2013, Nevada Association
Services, Inc. (NAS) recorded a notice of delinquent
assessment lien on behalf of Corte Madera showing that
Horton owed Corte Madera $1,649.22 on its homeowners
association (HOA) lien. On October 11, 2013, NAS recorded
a notice of default. By then, Horton owed Corte Madera
$2,955.10.
6 CITIMORTGAGE V. CORTE MADERA HOA
BANA responded to the notice of default in a letter to
Corte Madera.1 The letter argued that BANA’s lien generally
took priority over the HOA lien, but it also conceded that the
portion of the HOA lien amounting to nine months of
common assessments was “arguably senior” to BANA’s deed
of trust pursuant to section 116.3116 of the Nevada Revised
Statutes. BANA requested that Corte Madera identify the
superpriority amount of its HOA lien, with a breakdown of
nine months’ assessments so BANA could calculate and
tender that portion of the lien. Corte Madera acknowledged
receipt of BANA’s letter but responded that it required all
payoff requests to be submitted through its online request
form. Corte Madera provided no information about the
amount due to satisfy the superpriority portion of the HOA
lien. Neither BANA nor Citi submitted an online request to
Corte Madera.
Corte Madera recorded a notice of trustee sale in April
2014, and Susan Patchen purchased the property for $11,100
at the non-judicial foreclosure sale that followed. Patchen
later executed a quitclaim of her interest to The Eagle and the
Cross, LLC (Eagle).
In February 2016, Citi filed a complaint in the federal
district court for the District of Nevada naming Corte Madera,
NAS, Patchen, and Eagle as defendants. The complaint
alleged that defendants breached the duty of good faith
imposed by section 116.3113 of the Nevada Revised Statutes,
1
Even though the deed of trust had been reassigned to Citi in June
2013, BANA’s counsel sent the inquiry letter to Corte Madera. It is not
clear from the record why BANA, rather than Citi, attempted to preserve
Citi’s interest after the deed had been reassigned to Citi, but both parties
attribute BANA’s actions to Citi.
CITIMORTGAGE V. CORTE MADERA HOA 7
and it included a claim for wrongful foreclosure against NAS
and Corte Madera. Citi also sought to quiet title against all
defendants. The complaint prayed for equitable relief from
foreclosure and a preliminary injunction prohibiting Eagle
from selling or encumbering the property and requiring that
Eagle pay all taxes, insurance, and HOA dues. The
defendants filed counterclaims for quiet title and injunctive
relief. Eventually, the parties filed cross-motions for
summary judgment.
Citi does not dispute that section 38.330(1) of the Nevada
Revised Statutes required its complaint to be accompanied by
a sworn statement indicating that its claims for breach of the
duty of good faith and for wrongful foreclosure had been
mediated, and that no such statement was filed. The district
court dismissed these two claims because Citi failed to certify
that it had attempted to mediate. Citi does not appeal the
district court’s order dismissing these claims.2
Turning to Citi’s quiet title claim, the district court
rejected Citi’s due process argument because it concluded
that Citi lacked standing to assert BANA’s due process rights,
and because Citi did not dispute receiving actual notice of the
non-judicial foreclosure sale. Because the court concluded
that Citi failed to offer evidence that the foreclosure sale price
was unreasonable due to any fraud, unfairness, or oppression,
the court also rejected Citi’s argument that the sale should be
set aside.
2
The district court also ruled that Citi’s request for injunctive relief
was not cognizable as a stand-alone claim. Citi does not appeal that
ruling.
8 CITIMORTGAGE V. CORTE MADERA HOA
In this opinion, we address Citi’s tender and bankruptcy
arguments in support of its quiet title claim. The district
court rejected Citi’s argument that BANA’s letter to Corte
Madera successfully tendered the superpriority portion of the
lien. The court ruled that the lender’s offer to pay the
superpriority portion, conditioned on receipt of “adequate
proof” of the amount of the lien, was not a valid tender. The
district court also recognized that Citi’s complaint alleged
that the notice of delinquent assessment and notice of default
violated the automatic bankruptcy stay that arose when
Horton filed for chapter 7 protection. Neither party briefed
that issue in the district court, but the district court reached it
and decided that the foreclosure sale did not violate the
bankruptcy stay because Horton received a discharge in May
2012, her bankruptcy case was closed in October 2013, and
Corte Madera’s non-judicial foreclosure sale did not occur
until May 2014.3
Citi timely appealed the district court’s order granting
summary judgment to defendants on its quiet title claim.
STANDARD OF REVIEW
We review de novo a district court’s order granting
summary judgment. Fed. Home Loan Mortg. Corp. v. SFR
Invs. Pool 1, LLC, 893 F.3d 1136, 1144 (9th Cir. 2018), cert.
denied, 139 S. Ct. 1618 (2019).
3
Having ruled in defendants’ favor, the district court declined to
consider Citi’s argument that Patchen was not a bona fide purchaser. See
Wells Fargo Bank, N.A. ex rel. Holders of HarborView Mortg. Loan Tr.
Mortg. Loan Pass-Through Certificates, Series 2006-12 v. Radecki,
426 P.3d 593, 596–97 (Nev. 2018) (en banc).
CITIMORTGAGE V. CORTE MADERA HOA 9
DISCUSSION
Section 116.3116(1) of the Nevada Revised Statutes
allows homeowners associations to pursue liens on members’
homes for unpaid assessments and charges. HOA liens are
split into superpriority and subpriority components; the
superpriority component is prior to all other liens, including
first deeds of trust, with enumerated exceptions not relevant
here. Nev. Rev. Stat. § 116.3116(2). The superpriority
portion comprises nine months’ worth of common
assessments and any nuisance-abatement or maintenance
charges. Id. § 116.3116(3); see also Bank of Am., N.A. v.
Arlington W. Twilight Homeowners Ass’n, 920 F.3d 620, 622
(9th Cir. 2019) (per curiam); SFR Invs. Pool 1 v. U.S. Bank,
N.A. (“SFR Investments”), 334 P.3d 408, 411 (Nev. 2014) (en
banc), superseded by statute on other grounds as stated in
Saticoy Bay LLC Series 9050 W Warm Springs 2079 v. Nev.
Ass’n Servs., 444 P.3d 428 (Nev. 2019). An HOA may
foreclose on its superpriority lien through a non-judicial
foreclosure sale. See Nev. Rev. Stat. § 116.31162; see also
Arlington W., 920 F.3d at 622.
To initiate a non-judicial foreclosure proceeding, an HOA
must give notice of delinquency and wait 90 days to allow the
homeowner to pay off the lien. See Nev. Rev. Stat.
§ 116.31162. Notice of default and notice of sale must be
provided to the homeowner and to any holders of security
interests in the property. Id. The holder of the first deed of
trust may protect its collateral by tendering the amount of the
superpriority portion of the lien to the HOA. SFR Invs.,
334 P.3d at 411. Before 2015, these notices were not
10 CITIMORTGAGE V. CORTE MADERA HOA
required to state the amount of the superpriority portion.4
Interpreting the version of the statute in effect when Corte
Madera sought to foreclose on Horton’s property, the Nevada
Supreme Court ruled that, because notices of default were
required to be sent to all lienholders, it was permissible for
the notice to state the total amount in default without
segregating the superpriority amount. Id. at 418. The court
reasoned that lenders holding first deeds of trust could protect
their interests by either determining and tendering the exact
amount of the superpriority component, or by tendering the
full amount indicated in the notice and requesting a refund of
the balance. Id.
A. BANA’s Offer Did Not Constitute Valid Tender.
Citi argues that Corte Madera’s non-judicial foreclosure
sale did not extinguish its interest because BANA tendered
the superpriority portion of the lien to Corte Madera. More
specifically, Citi argues that BANA’s letter to Corte Madera
constituted a valid tender because the letter insisted on a
permissible condition: that Corte Madera present “adequate
proof” of the amount due for nine months’ assessments.
BANA’s letter recounted the relevant provisions of section
116.3116 and requested a copy of the “HOA payoff ledger
detailing the super-priority amount by providing a breakdown
of nine (9) months of common HOA assessments in order for
us to calculate the super priority [sic] amount.”
The Nevada Supreme Court has cited with approval the
commonly recognized definition of tender as “an offer to
4
In 2015, section 116.3116 of the Nevada Revised Statutes was
amended to require HOAs to specify the amount of the superpriority
portion of the lien in the notice of default. 2015 Nev. Stat., ch. 226.
CITIMORTGAGE V. CORTE MADERA HOA 11
perform a condition or obligation, coupled with the present
ability of immediate performance.” 7510 Perla Del Mar Ave
Tr. v. Bank of Am., N.A., 458 P.3d 348, 350 (Nev. 2020) (en
banc) (quoting Cochran v. Griffith Energy Serv., Inc.,
993 A.2d 153, 166 (Md. Ct. Spec. App. 2010)). Perla Del
Mar thus endorsed “the generally accepted rule that a promise
to make a payment at a later date or once a certain condition
has been satisfied cannot constitute a valid tender.” Id. Valid
tender of the superpriority portion discharges an HOA lien,
Arlington W., 920 F.3d at 622, but the tender either must be
unconditional or include only those “conditions on which the
tendering party has a right to insist,” such as a request for
satisfaction of judgment or a statement that the acceptance of
tender satisfies the superpriority portion of the lien, Bank of
Am., N.A. v. SFR Invs. Pool 1, LLC, 427 P.3d 113, 117–18
(Nev. 2018) (en banc).
In Perla Del Mar, counsel for the lender, BANA, sent an
inquiry letter to the HOA’s agent, NAS, substantively
identical to the one BANA sent in this case. 458 P.3d at 349.
Upon receipt of the notice of default, BANA’s counsel
informed NAS that it would pay the superpriority portion of
the lien after receiving proof of the amount. Id. Just as in
this case, NAS did not specify the superpriority amount and
proceeded with its non-judicial foreclosure sale. Id. At a
subsequent bench trial on the purchaser’s quiet title claim, the
trial court heard testimony that NAS’s policy was to reject
any payment for less than the full amount of the lien. Id.
at 349–50.
Perla Del Mar held that a mere offer to pay at a later
time, after the superpriority amount is determined, does not
constitute a valid tender. Id. at 350–51. It also held that
formal tender is excused when it is known that the party
12 CITIMORTGAGE V. CORTE MADERA HOA
entitled to payment will reject it. Id. at 351. Citi argues that
the district court did not have the benefit of Perla Del Mar
when it dismissed Citi’s quiet title claim, and it urges us to
remand its appeal to the district court in light of this
intervening case law. We decline to do so.
Perla Del Mar does not alter the validity of Citi’s tender.
BANA’s letter extended an offer to pay the superpriority
amount of Corte Madera’s lien, “whatever it is,” when BANA
received adequate proof of the amount. Corte Madera replied
that all payoff requests must be made exclusively through an
online request system, but BANA failed to submit such a
request. Citi’s reliance on Perla Del Mar is unavailing
because, in this case, BANA insisted on the same condition
that Perla Del Mar prohibited.
Citi argues on appeal that its tender was sufficient
because its offer to pay the superpriority portion could not
have been more definite given the information available. Citi
contends that the district court erred by relying on section
116.31162(1)(b) of the Nevada Revised Statutes to decide
that Corte Madera’s notice of default was adequate. At the
time, section 116.31162(1)(b) identified the information the
HOA was required to include in its notice of default, and the
statute permitted the notice to include only the total amount
due to the HOA. Citi contends that, directed to homeowners,
the statutorily required notice made sense because
homeowners must satisfy the entire debt. But Citi argues that
it had no way to calculate the superpriority amount of Corte
Madera’s lien, and that no Nevada precedent required it to
satisfy junior liens in order to protect its interest.
Citi’s argument fails because it overlooks the Nevada
Supreme Court’s ruling that the operative version of section
CITIMORTGAGE V. CORTE MADERA HOA 13
116.3116 allowed lenders to satisfy the superpriority portion
of an HOA lien by paying the entire amount in the notice of
default and seeking reimbursement. SFR Invs., 334 P.3d
at 418. Citi also overlooks the plain text of
section 116.3116(3), which specifies that the superpriority
portion comprises nine months’ worth of assessments and any
nuisance-abatement and maintenance charges. The district
court did not err when it concluded that Citi was obligated to
satisfy the superpriority portion of the lien in order to protect
its interest. See Nev. Rev. Stat. § 116.3116(2).
Citi argues that its tender was sufficient on the facts of
this case because it did not owe nuisance-abatement and
maintenance charges. But Citi misapprehends the district
court’s ruling. In BANA’s letter to Corte Madera and in
Citi’s summary judgment briefing, the lenders asserted that
the superpriority portion was limited to nine months’ worth
of common assessments. In fact, in its summary judgment
briefing, Citi insisted that it owed only nine months’ worth of
common assessments and “not one penny more.” It was in
response to Citi’s assertion that the superpriority portion was
limited to nine months’ worth of assessments that the district
court observed, per section 116.3116(3), that the superpriority
portion includes nine months’ worth of assessments and any
unpaid maintenance and nuisance-abatement charges.
Though Citi persists in arguing that no nuisance-abatement or
maintenance charges were owed in this case, it fails to offer
any persuasive response to the district court’s ruling that
Citi’s tender was impermissibly conditional. The outcome of
this issue is thus dictated by Nevada’s common-law
requirement for tender. The district court did not err by
observing that Citi’s offer to pay nine months’ assessments
was not the equivalent of an offer to pay the superpriority
portion of Corte Madera’s lien. And in light of Perla Del
14 CITIMORTGAGE V. CORTE MADERA HOA
Mar, the district court did not err by ruling that Citi’s tender
was impermissibly conditional.
Citi alternatively argues that its obligation to tender
should be excused because NAS had a known policy of
rejecting any payment for less than the full lien amount. Citi
first suggested that its obligation to tender should be excused
on the basis of futility in response to this court’s clerk order
inquiring whether this appeal should be remanded in light of
the decision in Arlington West, 920 F.3d 620. Arlington West
considered whether section 116.3116 of the Nevada Revised
Statutes affords constitutionally adequate notice to
lienholders. 920 F.3d at 623–24. Rather than revisiting the
due process argument, Citi urged us to remand in light of
Bank of America, N.A. v. Thomas Jessup, LLC Series VII,
435 P.3d 1217 (Nev. 2019) (per curiam) (“Jessup I”), vacated
on reconsideration en banc, 2020 WL 2306320 (Nev. May 7,
2020) (unpublished) (“Jessup II”), because Citi read that case
as acknowledging a general rule that formal tender is excused
if it would have been rejected.
Jessup II did not ultimately address the futility-of-tender
issue,5 but the published opinion in Perla Del Mar did. In
addition to reiterating the standard for adequate tender, Perla
Del Mar held that tender may be excused as futile if it would
have been rejected. 458 P.3d at 351. Citi now urges us to
remand so the district court may reconsider its summary
judgment ruling with the benefit of Perla Del Mar. But Citi
5
The en banc Nevada Supreme Court issued an unpublished order
that reiterated Jessup I’s requirements for tender but included no
substantive ruling on futility because the record in that case did not
establish that tender would have been rejected. See Jessup II, 2020 WL
2306320, at *1.
CITIMORTGAGE V. CORTE MADERA HOA 15
did not preserve the futility argument it now advances. At
oral argument before our court, Citi conceded that it did not
introduce evidence in the district court that would support a
finding of futility. Though Citi argues that it would have
pursued a futility-of-tender argument in the district court if it
had had the benefit of the recent Nevada case law addressing
futility, the futility-of-tender concept discussed in Perla Del
Mar is nothing new. The Nevada Supreme Court explained
that the ruling in Perla Del Mar was based on “a generally
accepted exception” to the rule requiring actual tender, not a
fundamental change in Nevada law. 458 P.3d at 351
(collecting cases). And we note that Appellees cited the well-
established futility rule in their answering brief in this appeal.
(“The burden of proving tender and unjustified refusal rests
with the asserting party.” (emphasis added) (citing 74 Am.
Jur. 2d Tender § 47)). Yet Citi’s reply brief continued to
argue only that its tender was valid.
The district court did not err when it ruled that BANA’s
inquiry letter was impermissibly conditional, and Citi did not
preserve its argument that its tender was excused. We decline
to consider Citi’s unpreserved futility-of-tender argument,
raised for the first time on appeal, Smith v. Hughes Aircraft
Co., 22 F.3d 1432, 1438 (9th Cir. 1993), or to remand for
further factual development.
B. Violation of the Automatic Bankruptcy Stay
Citi’s complaint included the allegation that Corte
Madera’s foreclosure sale violated the automatic bankruptcy
stay. Specifically, the complaint alleged that the sale was
void and must be set aside because the notice of delinquent
assessment lien, recorded on July 2, 2013, and the notice of
default, recorded on October 11, 2013, were actions taken in
16 CITIMORTGAGE V. CORTE MADERA HOA
violation of the automatic bankruptcy stay that arose pursuant
to 11 U.S.C. § 362(a) when Horton filed her bankruptcy
petition. Acts that violate the automatic stay include “any act
to create, perfect, or enforce any lien against property of the
estate.” § 362(a)(4). Citi’s complaint alleges that the
Danborough Court property became property of the estate on
the day Horton filed her chapter 7 petition, February 29,
2012, but the complaint also suggests the notices may have
constituted acts to “create, perfect, or enforce” a lien against
property of the debtor pursuant to § 362(a)(5). The complaint
does not specify which provision—§ 362(a)(4) or
§ 362(a)(5)—the notices allegedly violated.
Citi did not raise an issue regarding the bankruptcy stay
in its summary judgment briefing, but the district court’s
order granting summary judgment included a sua sponte
ruling that the foreclosure sale did not violate the stay. The
court relied on the date of the foreclosure sale to conclude
that the complaint’s contention failed, reasoning that,
“[a]ccording to the complaint, the foreclosure sale did not
take place until May 16, 2014—after the borrowers received
a discharge in bankruptcy [on] May 30, 2012 and after the
bankruptcy case was closed [on] October 17, 2013.” Relying
on the complaint’s recitation of this sequence of events, the
district court concluded “the foreclosure sale will not be set
aside as it did not violate the automatic bankruptcy stay under
11 U.S.C. § 362(a).” On appeal, Citi reiterates the
complaint’s allegation that the notices themselves violated the
automatic stay, that the notices must be deemed void as a
result, and that the subsequent foreclosure sale must be set
aside for lack of adequate notice. See Schwartz v. United
States (In re Schwartz), 954 F.2d 569, 571 (9th Cir. 1992)
(“[V]iolations of the automatic stay are void, not voidable.”).
CITIMORTGAGE V. CORTE MADERA HOA 17
The filing of a bankruptcy petition automatically stays
“actions by all entities to collect or recover on claims” against
the debtor and the property of the estate. Burton v. Infinity
Capital Mgmt., 862 F.3d 740, 746 (9th Cir. 2017). The stay
is “effective against the world, regardless of notice.” Morris
v. Peralta (In re Peralta), 317 B.R. 381, 389 (B.A.P. 9th Cir.
2004). We have said that “[g]enerally, the filing of
bankruptcy will stay all proceedings relating to a foreclosure
sale.” Mann v. Alexander Dawson, Inc. (In re Mann),
907 F.2d 923, 926–27 (9th Cir. 1990).
Our court has not had occasion to decide whether notices
filed pursuant to Nevada’s non-judicial foreclosure statute
constitute acts to create, perfect, or enforce liens for purposes
of § 362(a). But we have held that acts that “immediately or
potentially threaten the debtor’s possession of its property”
violate the stay, Morgan Guar. Tr. Co. of N.Y. v. Am. Sav. &
Loan Ass’n, 804 F.2d 1487, 1491 (9th Cir. 1986), and at least
one bankruptcy court has recognized that the stay bars
recording notices of default or delinquent assessments “that
would lead to foreclosure of property of the debtor’s estate,”
In re Capital Mortg. & Loan, Inc., 35 B.R. 967, 971 (Bankr.
E.D. Cal. 1983).
The district court misperceived the contention in Citi’s
complaint and mistakenly focused on the foreclosure sale
rather than on the notices of delinquent assessment and
default. But we cannot agree with Citi that it is necessarily
entitled to prevail on this claim. With some exceptions
inapplicable here, § 362(a)(4) stays remain in effect “until
such property is no longer property of the estate,”
§ 362(c)(1); see also Bigelow v. Comm’r, 65 F.3d 127, 129
(9th Cir. 1995) (per curiam); 3 Collier on Bankruptcy
¶ 362.06. Citi’s complaint alleged that the Danborough Court
18 CITIMORTGAGE V. CORTE MADERA HOA
property remained property of the bankruptcy estate until the
Trustee abandoned it on October 17, 2013. But the
complaint, and Citi’s brief on appeal, both suggest that Citi
contends the Danborough Court property was either property
of the estate or property of the debtor. If the Danborough
Court property was property of the debtor, the stay lifted on
the earliest of the case closure, case dismissal, or bankruptcy
discharge. See § 362(c)(2). Of those three dates, the earliest
was the bankruptcy discharge on May 30, 2012, before Corte
Madera filed any of its foreclosure-related notices. Under
this scenario, the notices would not have violated the stay.
We therefore remand for the district court to consider
whether the property was property of the debtor or of the
estate, to determine whether the notices violated the
bankruptcy stay, and to address whether Citi has standing to
challenge the alleged violation.
AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED. The parties shall bear their own costs on
appeal.