Opinion
No. 13-15470
08-21-2015
DIAKONOS HOLDINGS LLC, Trustee on behalf of Coventry Green Trust, Plaintiff - Appellant, v. COUNTRYWIDE HOME LOANS, INC.; et al., Defendants - Appellees.
NOT FOR PUBLICATION
D.C. No. 2:12-cv-00949-KJD-NJK MEMORANDUM Appeal from the United States District Court for the District of Nevada
Kent J. Dawson, Senior District Judge, Presiding
Submitted August 10, 2015 San Francisco, California Before: REINHARDT, TASHIMA, and CALLAHAN, Circuit Judges.
This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.
The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2).
Appellant Diakonos Holdings LLC ("Diakonos") appeals the dismissal of its suit to quiet title on a property located at 2704 Coventry Green Avenue in Henderson, Nevada. Because the parties are familiar with the facts and procedural history, we do not restate them except as necessary to explain our decision. We have jurisdiction under 28 U.S.C. § 1291, and we reverse and remand for further proceedings.
Appellees' unopposed Motion for Judicial Notice filed April 21, 2014 is GRANTED. The parties' Joint Motion for an Order Remanding This Case filed February 12, 2015 is DENIED AS MOOT. --------
The district court dismissed Diakonos' suit based on its determination that a homeowner's association ("HOA") foreclosure based on a super-priority lien under Nevada law does not extinguish a first security deed of trust. However, the Nevada Supreme Court has since held in SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014), that an HOA has a true super-priority lien on a property for nine months of unpaid assessments, and foreclosure on this lien extinguishes all other interests in that property. Accordingly, the district court's dismissal, to the extent it was based on a contrary interpretation of the Nevada HOA super-priority statutory scheme, was erroneous. See, e.g., Olympic Sports Prods., Inc. v. Universal Athletic Sales Co.,760 F.2d 910, 913 (9th Cir. 1985) (federal courts "are bound to follow the decisions of a state's highest court in interpreting that state's law") (citation omitted).
We accordingly REVERSE the district court's dismissal and REMAND for further proceedings. This remand is without prejudice to any constitutional arguments the parties may make below, which the district court may address in the first instance. We note that the State of Nevada or the Federal Housing Finance Agency may wish to intervene in the proceedings below, in light of the possible constitutional issues that the district court may address on remand.
REVERSED AND REMANDED.