BANK OF AMERICA, NA, FKA Countrywide Home Loans Servicing, LP, Successor by Merger… v. Ann Losee Homeowners’ Association

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BANK OF AMERICA, NA, FKA
Countrywide Home Loans Servicing, LP,
Successor by Merger to BAC Home Loans
Servicing, LP,
Plaintiff-counter-
defendant-Appellee,
v.
ANN LOSEE HOMEOWNERS’
ASSOCIATION; NEVADA NEW BUILDS,
LLC; JANET MARLENY GARCIA;
ABSOLUTE COLLECTION SERVICES,
LLC,
Defendants,
and
ARKHAM, LLC; ARKHAM XIII, LLC,
Defendants-counter-
claimants-Appellants.
No. 18-17319
D.C. No.
2:16-cv-00407-JCM-CWH
MEMORANDUM*
Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
FILED
DEC 22 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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Submitted December 21, 2021**
San Francisco, California
Before: O’SCANNLAIN, FERNANDEZ, and SILVERMAN, Circuit Judges.
Arkham, LLC and Arkham XIII, LLC (collectively, “Arkham”) appeal from
the summary judgment granted to Bank of America, N.A. in this quiet
title/declaratory judgment action. As the facts are known to the parties, we repeat
them only as necessary to explain our decision.
Nevada law “allows homeowners associations to pursue liens on members’
homes for unpaid assessments and charges.” CitiMortgage, Inc. v. Corte Madre
Homeowners Ass’n, 962 F.3d 1103, 1106 (9th Cir. 2020). “HOA liens are split
into superpriority and subpriority components; the superpriority component is prior
to all other liens, including first deeds of trust.” Id. Only two components of an
HOA lien enjoy superpriority over a first trust deed: “[1] charges for maintenance
and nuisance abatement, and [2] nine months of unpaid assessments.” Bank of
Am., N.A. v. SFR Invs. Pool 1, LLC, 427 P.3d 113, 117 (Nev. 2018) (en banc)
(“SFR Investments”); see Nev. Rev. Stat. § 116.3116(2) (2013).
“[A]n HOA can extinguish the first deed of trust by foreclosing on its
superpriority lien.” Bank of Am., N.A. v. Arlington W. Twilight Homeowners
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).

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Ass’n, 920 F.3d 620, 622 (9th Cir. 2019) (per curiam). To avoid such
extinguishment, the holder of the first trust deed must pay the full superpriority
component of the HOA lien—that is, nine months of fees, along with any unpaid
maintenance or nuisance-abatement charges. See SFR Invs. Pool, 427 P.3d at 117.
“If the HOA’s ledger does not show any charges for maintenance or nuisance
abatement, a tender of nine months of HOA dues is sufficient.” Arlington W.,
920 F.3d at 623; SFR Invs. Pool, 427 P.3d at 118 (When “the HOA [does] not
indicate that the property had any charges for maintenance or nuisance abatement,”
the first trust deed holder pays “the full superpriority amount” when it pays nine
months of dues.).
The district court correctly concluded that these principles “control the . . .
analysis in this case.” It observed that Bank of America relied on the HOA’s
representations to calculate the value of nine months of assessments. It further
observed that the HOA never indicated there were any unpaid maintenance or
nuisance-abatement charges. Accordingly, Bank of America’s tender of nine
months of assessments was for the full superpriority portion of the HOA lien.
Arkham focuses its brief on a different aspect of Bank of America’s tender,
contending that the accompanying cover letter contained a “false and untrue
statement of law” that somehow nullified the tender. In essence, Arkham attacks
as “false” the letter’s statement that certain sums incurred under “paragraphs (j) to

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(n)” of Nev. Rev. Stat. § 116.3102—the HOA lien statute—are potentially junior
to a first trust deed. Because “paragraph (j)” addresses (in part) maintenance and
nuisance-abatement charges, and despite Arkham’s admission that “there were no
maintenance and nuisance abatement charges,” Arkham apparently believes the
tender was invalid per se as it “was conditioned upon the mandatory acceptance of
a false and untrue statement of law.”
Arkham’s argument is meritless. It ignores crucial context: Bank of
America was disputing the HOA’s position that collection-related costs were
properly counted in the superpriority portion of the lien. Thus, Bank of America
quoted the HOA lien statute to argue that charges “pursuant to paragraphs (j) to
(n),” Nev. Rev. Stat. § 116.3116(1) (2013), were junior “to the extent the lien is for
fees and charges imposed for collection and/or attorney fees, collection costs, late
fees, service charges and interest.” This statement simply does not address the
issue of whether maintenance or nuisance-abatement charges can be part of the
superpriority portion of an HOA lien.
Further, Bank of America did not “condition” its tender on its alleged refusal
to pay for items in “paragraph (j).” The condition in Bank of America’s tender
cover letter was that “[a]cceptance of” Bank of America’s tender would “serve to
show that [Bank of America’s] Super-Priority Amount has been paid in full.”
Thus, as in SFR Investments, “Bank of America’s letter stated that acceptance of

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the tender would satisfy the superiority portion of the lien, preserving Bank of
America’s interest in the property. Bank of America had a legal right to insist on
this.” SFR Invs., 427 P.3d at 607–08; see Arlington W., 920 F.3d at 623 (“Bank of
America was entitled to insist on the condition it imposed in its tender, which was
that acceptance would satisfy the HOA’s superpriority lien.”). Both here and in
SFR Investments, Bank of America paid the full amount reflected in the HOA’s
ledger, which in both cases did not include any maintenance or nuisance-abatement
charges. SFR Invs., 427 P.3d at 607. In other words, Bank of America paid what
the HOA’s ledger said it owed: $180.00 for nine months of dues and $0.00 for
maintenance and nuisance-abatement costs. “On the record presented, this was the
full superpriority amount.” See id.
AFFIRMED.

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