Petition for Writ of Certiorari — SFR Investments Pool 1, LLC, Petitioner v. M&T Bank, et al.

No. 20-___

IN THE

SFR INVESTMENTS POOL 1, LLC,

Petitioner,

v.

M&T BANK; FEDERAL HOME LOAN MORTGAGE

CORPORATION,

Respondents.

On Petition for a Writ of Certiorari

to the U.S. Court of Appeals for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

Jacqueline A. Gilbert

Diana Cline Ebron

Counsel of Record

KIM GILBERT EBRON

7625 Dean Martin Dr.

Ste. 110

Las Vegas, NV 89139

(702) 400-4130

Jackie@kgelegal.com

QUESTIONS PRESENTED

Fannie Mae and Freddie Mac buy and securitize

residential mortgages. In 2008, the Federal Housing

Finance Authority (FHFA or Agency) put Fannie and

Freddie into conservatorship. A federal statute provides that “[n]o property of the [FHFA] shall be subject

to levy, attachment, garnishment, foreclosure, or sale

without the consent of the Agency.” 12 U.S.C.

§ 4617(j)(3). Because Fannie and Freddie regularly

fail to record their interest in a property, many properties are foreclosed upon in potential violation of this

provision. FHFA has therefore frequently filed quiet

title actions asserting that Fannie or Freddie’s mortgages were not extinguished by a foreclosure sale. As

relevant here, 12 U.S.C. § 4617(b)(12) provides that

the “applicable statute of limitations with regard to

any Agency as conservator shall be” six years “in the

case of a contract claim” and three years “in the case

of any tort claim.” In these cases, the Ninth Circuit

held that even though there is no contract between petitioners and the FHFA, the actions were governed by

the longer, six-year limitations period for contract

claims. The questions presented are

1. Whether the FHFA’s structure violates separation of powers and, if so, whether its conservatorship

of Fannie Mae and Freddie Mac must be set aside.

2. Whether quiet title actions by FHFA, asserting

that a state law foreclosure failed to extinguish the

agency’s property interests, are contract claims for

purposes of 12 U.S.C. § 4617(b)(12).

ii

RULE 29.6 CORPORATE DISCLOSURE

STATEMENT

SFR Investments Pool 1, LLC’s (SFR) parent corporation is SFR Investments, LLC. No publicly held

corporation owns 10% or more of SFR’s stock.

iii

RELATED PROCEEDINGS

M&T Bank; Federal Home Loan Mortgage Corporation v. SFR Investments Pool 1, LLC, 9th Cir. Dkt.

No. 18-17395, Opinion entered June 25, 2020; Order

on rehearing entered August 4, 2020.

M&T Bank; Federal Home Loan Mortgage Corporation v. SFR Investments Pool 1, LLC, USDC Nev.

Case No. 2:17-cv-01867-JCM-CWH, Order and judgment entered November 15, 2018; order on SFR’s motion for reconsideration entered on April 10, 2019.

Also,

Federal Home Loan Mortgage Corporation, et. al,

v. SFR Investments Pool 1, LLC, C.A. Case No. 1915910,

and

Bourne Valley Court Trust v. Wells Fargo Bank,

N.A., C.A. Case No. 19-15253,

A joint Petition for Writ of Certiorari is being filed

for these two cases concurrently with the Petition in

this case. The cases are related and SFR requests the

Petitions be considered together.

iv

TABLE OF CONTENTS

QUESTIONS PRESENTED ........................................ i

RULE 29.6 CORPORATE DISCLOSURE

STATEMENT .............................................................. ii

RELATED PROCEEDINGS ...................................... iii

TABLE OF AUTHORITIES ....................................... vi

PETITION FOR A WRIT OF CERTIORARI.............. 1

OPINIONS BELOW .................................................... 1

JURISDICTION .......................................................... 1

RELEVANT STATUTORY PROVISIONS ................. 1

STATEMENT OF THE CASE .................................... 1

I.

Legal Background ................................................. 3

II. Factual And Procedural History .......................... 6

REASONS FOR GRANTING THE WRIT .................. 9

I.

The Petition Should Be Held For Collins v.

Mnuchin .............................................................. 10

II. Question Two Should Be Granted Because

The Ninth Circuit Has Expanded The Power

Of A Federal Agency To Extinguish Private

Property Rights In Contravention Of The

Plain Language Of A Federal Statute ................ 13

A. FHFA Actions To Invalidate Foreclosures

Sales Under The Federal Foreclosure

Bar Do Not Assert “Contract Claims” .......... 14

B. The FHFA’s Suit Alleging Violation

Of The Federal Foreclosure Bar Is A “Tort

Claim” Within The Meaning Of The Act ..... 16

v

C. The Ninth Circuit’s Decision Will Have

Broad And Harmful Consequences .................... 24

CONCLUSION .......................................................... 27

APPENDIX A: Court of Appeals Opinion

(9th Cir. 2020) ............................................................ 1a

APPENDIX B: District Court Order

(D. Nev. 2019) .......................................................... 11a

APPENDIX C: District Court Order

(D. Nev. 2018) .......................................................... 17a

APPENDIX D: Court of Appeals Order

(9th Cir. 2020) .......................................................... 26a

APPENDIX E: Relevant Statutes .......................... 28a

vi

TABLE OF AUTHORITIES

Cases

Ashcraft v. King,

278 Cal. Rptr. 900, 228 Cal. App. 3d 604 (1991) .. 19

Barmettler v. Reno Air, Inc.,

114 Nev. 441, 956 P.2d 1382 (1998) ...................... 19

Berezovsky v. Moniz,

869 F.3d 923 (9th Cir. 2017) .................................... 5

Bernard v. Rockhill Dev. Co.,

103 Nev. 132, 734 P.2d 1238 (1987) ................ 16, 17

Blanchard v. Blanchard,

108 Nev. 908, 839 P.2d 1320 (1992) ...................... 19

Bourne Valley Court Trust v. Wells Fargo

Bank, N.A.,

810 Fed. Appx. 492 (9th Cir. June 25, 2020) ........ 24

CFPB v. Seila Law LLC,

923 F.3d 680 (9th Cir. 2019) .................................. 12

Chase Plaza Condo. Ass’n,

98 A.3d 166 (D.C. 2014) ........................................... 4

Collins v. Union Fed. Sav. & Loan Ass’n,

99 Nev. 284, 662 P.2d 610 (1983) .......................... 18

Consol. Generator-Nevada, Inc. v. Cummins

Engine Co.,

114 Nev. 1304, 971 P.2d 1251 (1999) .................... 19

Culley v. County of Elko,

101 Nev. 838, 711 P.2d 864 (1985) ........................ 19

Curtis Publ’g Co. v. Butts,

388 U.S. 130 (1967) ................................................ 12

David v. Hett,

293 Kan. 679, 270 P.3d 1102 (2011) ...................... 16

vii

Dayton Valley Investors, LLC v. Union

Pacific R. Co.,

664 F. Supp. 2d 1174 (D. Nev. 2009) ..................... 21

Dillard Dept. Stores, Inc. v. Beckwith,

115 Nev. 372, 989 P.2d 882 (1999) ........................ 19

Dow Chemical Co. v. Mahlum,

114 Nev. 1468, 970 P.2d 98 (1998) ........................ 19

Executive Management, LTD v. Ticor Title

Insurance Co.,

114 Nev. 823, 963 P.2d 465 (1998) ........................ 19

Federal Home Loan Mortgage Corp. v. SFR

Investments Pool 1, LLC,

810 Fed. Appx. 589 (9th Cir. June 25, 2020) ........ 24

Freytag v. C.I.R.,

501 U.S. 868 (1991) .................................... 11, 12, 13

Glidden Co. v. Zdanok,

370 U.S. 530 (1962) .......................................... 11, 12

Guardian Tr. & Deposit Co. v. Fisher,

200 U.S. 57 (1906) .................................................. 17

Guardian Tr. & Deposit Co. v. Greensboro

Water Supply Co.,

115 F. 184 (C.C.W.D.N.C. 1902) ............................ 17

Hampton by Hampton v. Fed. Exp. Corp.,

917 F.2d 1119 (8th Cir. 1990) ................................ 17

Hernandez v. City of Reno,

97 Nev. 429, 634 P.2d 668 (1981) .......................... 19

Higgins v. Higgins,

103 Nev. 443, 744 P.2d 530 (1987) ........................ 19

J.J. Industries, LLC v. Bennett,

119 Nev. 269, 71 P.3d 1264 (2003) ........................ 19

viii

LN Management LLC Series 3732 Russell

Peterson v. Shadow Hills Master

Association,

474 P.3d 333 (Nev. Oct. 16, 2020) ................... 20, 22

Malone v. University of Kansas Medical

Center,

220 Kan. 371, 552 P.2d 885 (1976) ........................ 16

Megapulse, Inc. v. Lewis,

672 F.2d 959 (D.C. Cir. 1982) .......................... 22, 23

Miller v. Jones,

114 Nev. 1291, 970 P.2d 571 (1998) ...................... 19

Olivero v. Lowe,

116 Nev. 395, 995 P.2d 1023 (2000) ...................... 19

PHH Corp. v. CFPB,

881 F.3d 75 (D.C. Cir. 2018) .................................. 12

Prell Hotel Corp. v. Antonacci,

86 Nev. 390, 469 P.2d 399 (1970) .......................... 19

Seila Law LLC v. CFPB,

140 S. Ct. 2183 (2020) ...................................... 10, 13

SFR Investments Pool 1, LLC v. U.S. Bank,

N.A.,

334 P.3d 408 (Nev. 2014) ................................... 4, 15

Stalk v. Mushkin,

125 Nev. 21, 199 P.3d 838 (2009) .................... 20, 22

Summerhill Village Homeowners Ass’n v.

Roughley,

270 P.3d 639 (Wash. Ct. App. 2012)........................ 4

United States v. Brosnan,

363 U.S. 237 (1960) .................................................. 3

United States v. Limbs,

524 F.2d 799 (9th Cir. 1975) .................................. 17

ix

United States v. Neidorf,

522 F.2d 916 (9th Cir. 1975) .................................. 17

Zimmerman v. Bank of America National T.

& S. Ass’n,

191 Cal.App.2d 55, 12 Cal.Rptr. 319 (1961) ......... 20

Statutes

12 U.S.C. § 4617(a)(2) .......................................... 1, 2, 4

12 U.S.C. § 4617(b)(2)(A) ............................................. 4

12 U.S.C. § 4617(b)(2)(A)(i) ......................................... 2

12 U.S.C. § 4617(b)(12) ...................................... passim

12 U.S.C. § 4617(b)(12)(A)(ii) ................................ 8, 25

12 U.S.C. § 4617(j)(3)......................................... passim

28 U.S.C. § 1254(1) ...................................................... 1

A.R.S. § 12-542........................................................... 25

AS § 09.10.070 ........................................................... 25

Cal. Code Civ. Proc. § 339(1) ..................................... 25

NRS 11.070 .............................................................. 7, 8

NRS 11.190(3)(a) ......................................................... 7

NRS 11.190(3)(b) ....................................................... 14

NRS 11.190(3)(c) ........................................................ 25

NRS 116.3116(2) .......................................................... 4

NRS 116.31162(1) ........................................................ 4

O.R.S. § 12.110........................................................... 25

x

Other Authorities

FHFA’s Statement on HOA Super-Priority

Lien Foreclosures (Apr. 21, 2015),

www.fhfa.gov/Media/PublicAffairs/Pages/

Statement-on-HOA-Super-Priority-LienForeclosures.aspx ..................................................... 5

W. Keeton, Prosser and Keeton on the Law

of Torts § 92 (5th ed. 1984) .................................... 17

Prosser and Keeton on Torts,

§ 10 (5th ed. 1984) .................................................. 19

Real Estate Finance Law § 7:20 ................................. 3

Restatement (Third) of Property

(Mortgages) § 7.1 cmt. a........................................... 3

PETITION FOR A WRIT OF CERTIORARI

Petitioner SFR Investments Pool 1, LLC respectfully petitions for a writ of certiorari to review the

judgment of the United States Court of Appeals for the

Ninth Circuit.

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1a10a) is published at 963 F.3d 854. The opinion of the

district court (Pet. App. 11a-16a) is published at 2019

WL 1560426 (Order denying reconsideration); (Pet.

App. 17a-25a) 2018 WL 6003854 (Order on summary

judgment motions and motion for Rule 56(d) relief).

JURISDICTION

The judgment of the court of appeals e was entered on June 25, 2020. Pet. App. 1a. The court of

appeals denied petitioners’ timely petitions for rehearing en banc on August 4, 2020. Pet. App. 26a-27a. On

March 19, 2020, the Court extended the time within

which to file a petition for a writ of certiorari to 150

days from the date of an order denying a timely petition for rehearing. This Court has jurisdiction pursuant to 28 U.S.C. § 1254(1).

RELEVANT STATUTORY PROVISIONS

The relevant provisions of 12 U.S.C. §§ 4617(a)(2),

4617(b)(12), 4617(j)(3), Nevada Revised Statutes

§ 11.190 are included in Appendix D of this petition.

STATEMENT OF THE CASE

Respondents filed suit to allege that certain statelaw foreclosure sales failed to extinguish Fannie Mae

or Freddie Mac’s interest in the properties because the

sales violated the so-called Federal Foreclosure Bar,

2

12 U.S.C. § 4617(j)(3). That provision states that “[n]o

property of the” Federal Housing Finance Authority

(FHFA) “shall be subject to levy, attachment, garnishment, foreclosure, or sale without the consent of the

Agency, nor shall any involuntary lien attach to the

property of the agency.” Id. Here, Fannie Mae and

Freddy Mac’s interests in the properties became property of FHFA after that agency’s Director exercised his

unilateral power to place both entities into conservatorship. See 12 U.S.C. §§ 4617(a)(2), (b)(2)(A)(i).

The first question arises because the decision to

put the GSEs into conservatorship, which triggered

the Federal Foreclosure Bar, was made by an agency

whose insulation from presidential oversight violates

separation of powers principle. Because this Court is

presently considering whether the FHFA’s single-director structure violates separation-of-powers principals (and, if so the appropriate remedy) in Collins v.

Mnuchin, No. 19-422, the Court should hold this petition pending its decision in that case.

The second question presented by this petition

arises from the Ninth Circuit’s holding that a claim

based on the Federal Foreclosure Bar, seeking to set

aside the presumptive extinguishment of a deed of

trust by a Nevada’s homeowners association foreclosure sale, is a contract claim. This, despite acknowledging no contract or any agreement exists between

the parties, and despite Respondents expressly stating

they were not seeking to enforce the deed of trust

(DOT) or note. While FHFA must have an interest in

the note and deed of trust for it, a GSE or servicer, to

have standing to bring the claim, those documents are

not what is truly underlying the claim itself. Rather,

the claim is based on the so-called Federal Foreclosure

3

Bar, not any contract. The Ninth Circuit therefore focused its analysis on the wrong issue. The proper issue

is what would avoid extinguishment of the deed of

trust – and here it is the statute. A claim based on an

alleged violation of a statute is much more accurately

characterized as a tort claim than a contract claim.

I.

Legal Background

1. State laws pervasively permit lenders, homeowners associations, taxing authorities, repairmen,

and others to secure payment by recording a lien on

the debtor’s real property. When the debt is defaulted,

the lienholder may foreclose on the property, causing

it to be sold. The distribution of the proceeds is determined by the priority of the liens, which is established

by state law (often by statute). If the sale produces

less money than is needed to satisfy all the creditors,

those will liens of lesser priority (often called “junior”

lienholders) may not be paid.

State law also determines what happens to the

liens after the sale is completed. A foreclosure sale ordinarily extinguishes all liens junior to the lien being

foreclosed upon, but leaves intact any senior liens. See,

e.g., Real Estate Finance Law § 7:20; Restatement

(Third) of Property (Mortgages) § 7.1 cmt. a; see also

United States v. Brosnan, 363 U.S. 237, 250 (1960)

(noting a “private sale of its own force [is] effective under California law to extinguish all junior liens”). This

established rule allows the purchaser to take title to

the foreclosed property free and clear of the junior

liens, thereby removing a practical impediment to the

remedy’s effectiveness.

2. In Nevada, if HOA the assessments are not

paid, the association may enforce its lien against the

4

property through non-judicial foreclosure. NRS

116.31162(1).1 NRS 116.3116(2) gives a portion of the

lien priority over a first mortgage or deed of trust for

nine-months of unpaid dues (the lien for the rest of the

dues having its ordinary priority behind the mortgage

and other liens). See SFR Investments Pool 1, LLC v.

U.S. Bank, N.A., 334 P.3d 408, 411-14 (Nev. 2014).2

And, the association super priority lien operates like

any other senior lien – when the association forecloses

on it, all junior lienholders are entitled to any proceeds

in excess of the amount of the HOA’s lien but the junior liens are extinguished. Id. Accordingly, just as a

foreclosure initiated by the holder of a first mortgage

can extinguish a second mortgage, an HOA foreclosure

will extinguish the lien held by a bank with a first

mortgage or deed of trust on the property. Id. at 419.

3. Congress enacted HERA in 20083 and 12 U.S.C.

§ 4617(a)(2) gave the FHFA Director the discretion to

appoint FHFA conservator over the GSEs. HERA also

provided that FHFA as conservator succeeded to all

property of Fannie and Freddie, including the interest

in promissory notes and deeds of trust. 12 U.S.C.

§ 4617(b)(2)(A). Congress also adopted what has been

coined the “Federal Foreclosure Bar” or § 4617(j)(3)

which prevents foreclosure or sale of property of the

Agency without the Agency’s consent. This has been

1

Unless otherwise indicated, cites to the Nevada Revised

Statute are to the version in effect at the time of the actual foreclosures in this case – between 2012 and 2014.

2

See also Chase Plaza Condo. Ass’n, 98 A.3d 166, 172-78 (D.C.

2014); Summerhill Village Homeowners Ass’n v. Roughley, 270

P.3d 639 (Wash. Ct. App. 2012).

3

Housing and Economic Recovery Act of 2008.

5

deemed to mean that while an HOA in Nevada may

foreclose on its lien, federal law preempts the superpriority portion of the lien from extinguishing a deed

of trust securing a note owned by Fannie or Freddie.4

Berezovsky v. Moniz, 869 F.3d 923, 930-31 (9th Cir.

2017). As M&T and Freddie told the Ninth Circuit, it

issued a statement on April 21, 2015, well into litigation in scores of the NRS 116 HOA foreclosure cases

brought in Nevada, including this case, FHFA “has not

consented, and will not consent in the future, to the

foreclosure or other extinguishment of any Fannie or

Freddie lien or other property interest in connection

with HOA foreclosures of super-priority liens.” 5

4. The Ninth Circuit has recognized that an action claiming preemption based on the Federal Foreclosure Bar may be brought by a GSE or a loan servicing agent on behalf of FHFA. Berezovsky, 869 F.3d at

932-33. Here, M&T Bank was the purported servicer

and Freddie Mac the purported owner of the note to

which FHFA succeeded.

4. HERA provides the statutes of limitation for actions brought by the Agency or on its behalf. 12 U.S.C.

§ 4617(b)(12) provides in pertinent part:

4

Berezovsky held it was through implied preemption, not express. Id. at 931.

5

FHFA’s Statement on HOA Super-Priority Lien Foreclosures (Apr. 21, 2015), www.fhfa.gov/Media/PublicAffairs/Pages/

Statement-on-HOA-Super-Priority-Lien-Foreclosures.aspx; see

C.A. Dkt. 26 at 6 n.1 and accompanying text; see also D.C. Dkt.

21 Ex. I.

6

(12) STATUTE OF LIMITATIONS FOR ACTIONS

BROUGHT BY CONSERVATOR OR RECEIVER

(A) In general Notwithstanding any provision of any contract, the applicable statute of

limitations with regard to any action brought

by the Agency as conservator or receiver shall

be—

(i) in the case of any contract claim, the

longer of—

(I) the 6-year period beginning on the

date on which the claim accrues; or

(II) the period applicable under State

law; and

(ii) in the case of any tort claim, the longer

of—

(I) the 3-year period beginning on the

date on which the claim accrues; or

(II) the period applicable under State

law.

No other option is provided. Accordingly, to determine

the statute of limitations, first the claim must be categorized as either contract or tort. Then, the Agency

gets the longer of the state statute of limitations or the

time set forth in HERA, a minimum of 6 years for contract or 3 years for tort. Id.

II. Factual And Procedural History

Petitioner SFR bought the property at an HOA

nonjudicial foreclosure auction on July 11, 2012. Pet.

App. 4a-5a. As a matter of Nevada law, the sale presumptively extinguished all junior liens, including a

first trust held by respondent M&T Bank. Id. 5a. The

first deed of trust recorded against the Property at the

7

time named M&T Bank as beneficiary. Id. Neither the

deed of trust nor the assignment to M&T Bank named

Freddie as having an interest in the deed of trust or

note. D.C. Dkt. 21, Exs. A&B. Waiting until almost

five years after the sale, M&T Bank and Freddie,

whose interest was still not recorded in the public records, filed their complaint for quiet title alleging

preemption of the first deed of trust’s extinguishment

by the Federal Foreclosure Bar. Pet. App. 12a.

SFR moved to dismiss the complaint as timebarred under Nevada’s statute of limitation for liability arising from a statute, NRS 11.190(3)(a). Pet. App.

5a. Respondents opposed, claiming a five-year statute

of limitations applied under NRS 11.070, a statute

that applies to those who have been seized or possessed of the property. Pet. App. 5a. Respondents

never argued they were bringing a contract claim, that

the claim sounded in contract, or that the six-year

statute of limitations under HERA should apply. D.C.

Dkt. 13 at 5; D.C. Dkt. 43 at 15.

The district court denied SFR’s the motion, and

applied the five-year statute of limitations in NRS

11.070. Pet. App. 6a. Immediately thereafter, before

SFR had even answered the complaint, respondents

filed a motion for summary judgment based on a declaration and documents not previously disclosed. D.C.

Dkt. 20, 21, 24. Ultimately, the district court granted

summary judgment in favor of respondents.6 Pet. App.

17a.

6

In district court, SFR also sought further discovery, asserting Freddie and M&T Bank must produce the wet-ink promissory

note and other contracts proving the right to rely on the Federal

8

SFR appealed solely on the issue of statute of limitations, setting forth its analysis of the HERA statute

and why the claim must be categorized as non-contract

and therefore tort with a three-year statute of limitations. For the first time, on appeal, plaintiffs argued

the six-year statute of limitations applied to its claim

and the Agency filed an amicus brief in support of either the six-year contract statute of limitations or the

five-year statute under NRS 11.070. C.A. Dkt. 26 at 8.

The Ninth Circuit panel first determined

§ 4617(b)(12) applies to all claims brought by the

Agency. Pet. App. 6a. Then the panel acknowledged

“there is no contract between SFR and plaintiffs.” Id.

9a. Thus this could not be determined to be a breach

of contract or agreement between the parties as is required for a contract action. But the panel then stated

“the quiet title claims are entirely ‘dependent’ upon

Freddie’s lien on the Property, an interest created by

contract.” Id. Thus, it held the claims were “contract”

claims under § 4617(b)(12)(A)(ii). Id. The panel went

on to state that because respondents did not seek damages or breach of duty resulting in injury to person or

property it did not meet “traditional hallmarks of a

torts action.” Id. The court ignored that damages and

breach are also hallmarks of a contract action. And it

Foreclosure Bar. D.C. Dkt. 28 at 3-10, 30; D.C. Dkt. 28-1 at ¶¶

31-40. However, on appeal, SFR narrowed its focus to the statute

of limitations. The issues related to requiring best evidence and

requiring production of the contracts if the basis of the petition

for writ of certiorari filed concurrently herewith, from Ninth Circuit decisions issued the same day in Federal Home Loan Mortgage Corporation, et al. v. SFR Investments Pool 1, LLC, C.A.

Case No. 19-15910 and Bourne Valley Court Trust v. Wells Fargo

Bank, N.A., C.A. Case No. 19-15253.

9

did not address the argument that simply because

there is a contract in the background the Court must

consider, that does not change the action into a contract action itself.

Based on this analysis, the M&T Bank court held

the six-year statute of limitations applied and the action was timely filed. Id. 10a.

REASONS FOR GRANTING THE WRIT

The case warrants review for the same reasons

this Court granted certiorari in Collins v. Mnuchin,

No. 19-422. Because FHFA’s claims in this case arise

only because of the Agency’s decision to put Fannie

Mae and Freddie Mac into conservatorship, and because that act must be set aside if this Court determines that FHFA’s structure is unconstitutional, the

Court should hold this petition pending its decision in

Collins, and then make an appropriate disposition in

light of what the Court decides in that case.

The case independently warrants review because

the Ninth Circuit’s application of the statute of limitations for “contract claims” to a suit by FHFA against a

homeowner with whom it has no contract, defies the

plain language of the statute and basic common sense.

The Federal Foreclosure Bar is already an extensive

invasion of state sovereignty; FHFA suits after the fact

seeking to undo the legal effect of otherwise lawful

state sales are even worse. The decision in this case

takes that injury to state sovereignty even further by

maximizing the statute of limitations, and thereby

damaging reasonably settled expectations developed

under state property law. The Ninth Circuit’s error is

enormously consequential, affecting foreclosure sales

through the largest and most populous circuit in the

10

nation. Even more, the logic of the decision would extend the lengthy “contract” limitations period to every

claim brought by the FHFA involving or touching upon

real property, simply because the Agency has an interest in the note underlying the deed of trust. This invasion of property rights and state sovereignty should

not stand. This Court must intervene.

I.

The Petition Should Be Held For Collins v.

Mnuchin.

The decision below should be vacated because the

FHFA conservatorship is invalid, the product of decisions by an agency whose structure violates the Appointments Clause. Given that the constitutionality of

the FHA’s structure is presently before the Court in

Collins v. Mnuchin, No. 19-422, the Court should hold

this case pending its decision in that case and then remand to the Ninth Circuit for reconsideration in light

of the Court’s decision.

In Collins, this Court granted certiorari to decide

whether the FHFA’s single-director structure violates

the Appointments Clause and, if so, whether certain

actions taken by the agency while unconstitutionally

structured must be set aside. See Collins Pet. i. In its

merits briefs, the FHFA has conceded that its structure is unconstitutional in light of Seila Law LLC v.

CFPB, 140 S. Ct. 2183 (2020), which held that the indistinguishable structure of the CFPB violated the Appointments Clause. See Collins Federal Parties Reply

Br. 23-26. The Collins petitioners further argue that

in “a long line of cases, this Court has repeatedly set

aside the past actions of federal officials who were unconstitutionally insulated from oversight by the Pres-

11

ident or who otherwise served in violation of the Constitution’s structural provisions.” Collins Petr. Br. 62;

see also id. at 62-66 (discussing authorities). The Government resists vacatur of the agency action at issue

in Collins, although largely for case-specific reasons.

Collins Federal Parties Reply Br. 28-40.

As the Solicitor General has written, a hold is appropriate where the Court’s decision in a pending case

“could affect the analysis of [the] question” presented

by the petition or if “it is possible that the Court’s resolution of the question presented in [the pending case]

could have a bearing on the analysis of petitioner’s argument,” even if the cases do “not involve precisely the

same question.” U.S. BIO 7, Yang v. United States, No.

02-136. Here, FHFA claims that petitioners’ foreclosure sales failed to extinguish Fannie and Freddie’s

junior liens because the sales took place after FHFA

put both regulated entities under conservatorship,

thereby triggering the Foreclosure Bar. See Pet. App.

4a. Collins will decide whether the agency that made

that decision was unconstitutionally structured and

provide important guidance on whether, if not, that

means that actions taken during the conservatorship

can have legal effect.

That petitioners did not raise an Appointments

Clause challenge below does not preclude them from

raising the issue now. This Court has “expressly included Appointments Clause objections” in the category of “nonjurisdictional structural constitutional objections that could be considered on appeal whether or

not they were ruled upon below.” Freytag v. C.I.R., 501

U.S. 868, 878-79 (1991) (citing Glidden Co. v. Zdanok,

370 U.S. 530, 536 (1962)). The Court has thus considered Appointment Clause challenges “despite the fact

12

that [the challenge] had not been raised in the District

Court or in the Court of Appeals.” Id. at 879 (quoting

Glidden, 370 U.S. at 536). In such cases, the “strong

interest of the federal judiciary in maintaining the

constitutional plan of separation of powers” outweighs

any “disruption to sound appellate process entailed by

entertaining objections not raised below.” Ibid.

In this case, petitioners’ failure to raise an Appointments Clause challenge below imposed no “disruption to sound appellate practice,” ibid., because any

such argument would have been futile given existing

circuit precedent. See, e.g., Curtis Publ’g Co. v. Butts,

388 U.S. 130, 142-43 (1967) (“[T]he mere failure to interpose [a constitutional] defense prior to the announcement of a decision which might support it cannot prevent a litigant from later invoking such a

ground.”). At the time petitioners were litigating these

cases in the district court and on appeal, the Ninth

Circuit had upheld the constitutionality of the singledirector structure of the CFPB. See CFPB v. Seila Law

LLC, 923 F.3d 680 (9th Cir. 2019). Because there is

no material difference between the structure of the

FHFA and the CFPB, petitioners had no basis to raise

an Appointments Clause challenge in these cases until

this Court overturned the Ninth Circuit’s decision in

Seila Law. See Collins Federal Parties Reply Br. 3,

23-24 (FHFA conceding that its structure is indistinguishable from that of the CFPB for Appointments

Clause purposes); PHH Corp. v. CFPB, 881 F.3d 75,

175-76 (D.C. Cir. 2018) (Kavanaugh, J., dissenting)

(structure of FHFA “raises the same question we confront here” in Appointments Clause challenge to

CFPB). And this Court did not overrule Seila Law until after the Ninth Circuit issued its decisions in these

13

cases. Compare Seila Law LLC v. CFPB, 140 S. Ct.

2183 (2020) (decided on June 29, 2020), with Pet. App.

1a (decided on June 25, 2020).7

Thus, the Court should hold the case pending its

decisions in Collins (and possibly Carri, and Davis)

then remand the case to the Ninth Circuit for reconsideration in light of its decision.

II. Question Two Should Be Granted Because

The Ninth Circuit Has Expanded The Power

Of A Federal Agency To Extinguish Private

Property Rights In Contravention Of The

Plain Language Of A Federal Statute.

Regardless of the outcome in Collins, this Court

should grant plenary review of the second question

presented. The Ninth Circuit’s decision characterizing

plaintiff’s claim as contract is incorrect based on common law and Nevada definitions of tort and contract

claims. And, because tort claims are those arising from

7

To the extent there is any question about whether petitioners were required to raise an Appointments Clause challenge below, this Court’s impending decision in Car v. Commissioner, No.

19-1442, and Davis v. Saul, 20-105, could shed light on the matter. In those cases, the Court granted certiorari to decide whether

social security benefit claimants forfeit Appointment Clause challenges by failing to raise them before administrative law judges.

See Carr Pet. i; Davis Pet i. The petitioners argue, among other

things, that there was no need to raise the arguments in that forum because “the interests implicated by an Appointments

Clause challenge are so important that they can ‘be considered on

appeal whether or not they were ruled on below,” Carr Pet. 28

(quoting Freytag, 501 U.S. at 878-79), and because raising the issue would have been “futile” given the ALJs’ lack of authority to

accept the argument, id. at 27. See also Davis Pet. 22-23 & n.*

(same).

14

violation of common law or statutory duties. Thus, the

violation of the Federal Foreclosure Bar, § 4617(j)(3) is

more accurately characterized as a tort rather than a

contract.

Additionally, the question is important because it

allows classification of other FHFA property claims

into contract for purposes of obtaining a longer statute

of limitations; for example, trespass-a tort-would normally carry a three-year statute of limitations in Nevada, NRS 11.190(3)(b), but based on the panel’s reasoning here, it would be classified as a contract claim

if FHFA were bringing it. Even more importantly, the

same reasoning could be applied outside the context of

HERA to characterize any claim wherein a contract

lurked in the background, as a contract claim rather

than looking at the actual nature and basis of the

claim itself.

A. FHFA

Actions

To

Invalidate

Foreclosures Sales Under The Federal

Foreclosure Bar Do Not Assert “Contract

Claims.”

The Ninth Circuit’s holding on the statute of limitations cannot be reconciled with the plain language of

the statute. Section 4617(b)(12) of Title 12 reserves its

longest statute of limitations for “contract claims.”

The Ninth Circuit acknowledged that M&T’s suit did

not seek to enforce any contract, or seek relief for petitioner’s breach of any contract to which petitioner is a

party. Instead, it was sufficient, the court believed,

that “the quiet title claims are entirely ‘dependent’

upon Freddie's lien on the Property, an interest created by contract.” Pet. App. 9a. While the existence of

such a contract – between Freddie and some third

party – may have been a necessary condition to bring

15

suit, that is not the question posed by the statute,

which asks about the nature of the claim respondents

propose to adjudicate, not the broader circumstances

that may be connected in some way to the claims they

are actually asserting in the litigation.

Here, respondents did not seek to assert any contract right arising from the Note or the deed of trust,

to which petitioner is not a party. Put another way, the

mere existence of these contracts does not serve as the

basis to challenge the sale. The Nevada Supreme

Court’s decision in SFR Investments Pool 1, LLC v.

U.S. Bank, 130 Nev. 742, 334 P.3d 408 (2014), makes

that clear. There must be some other basis for the

challenge. And here it is the Federal Foreclosure Bar,

12 U.S.C. § 4617(j)(3).

In focusing on the fact that respondents’ suit involved a contract in an indirect way, the Ninth Circuit

thus asked and answered the wrong question. The

question is not what allows a servicer to get through

the courtroom doors, but rather, what serves as the

basis for the claim. Certainly, the Bank’s claim was

not based on the mere existence of a lien. If it were,

SFR would have won easily.

Thus, when the Ninth Circuit said the Bank’s claim

was a contract claim it was wrong. The Bank’s claim

arose solely because of the existence of the Federal

Foreclosure Bar. Without this statute, the Bank’s

claim would fail as a matter of law, and that remains

true irrespective of Freddie’s lien interest. This cements the notion the Note and deed of trust are not

the basis of the claim, and because this is the only relevant question when determining whether a claim

sounds in tort or contract, the Court erred when it

shifted the analysis to standing.

16

B. The FHFA’s Suit Alleging Violation Of

The Federal Foreclosure Bar Is A “Tort

Claim” Within The Meaning Of The Act.

Based on (i) the definitions of tort and contract

claims, and (ii) the D.C. Circuit’s instructive reasoning

that the mere existence of a contract does not turn

every claim into one arising in contract, the court of

appeals wrongly characterized FHFA’s claim.

The Ninth Circuit should have concluded instead

that the FHFA’s suit asserted tort claims within the

meaning of the statute of limitations provision.

1. Under common law, contract claims “constitute

a violation…of duties arising by virtue of the alleged

express agreement between the parties” while tort

claims deal with breaches of common law or statutory

duties independent of any contract, i.e. a “wrong independent of contract.”8 The basis of respondents’ claim

was the existence of a federal statute that preempted

a state statute. That is the very common law definition

of tort, a violation of something imposed by law.

Although the court of appeals did not expressly

state the specific definition of a “tort claim” it used,

the panel noted that FHFA’s claims did not involve

what it called the “traditional hallmarks of tort actions,” which include a claim for “damages,” as well as

a “breach of duty resulting in injury to person or property.” Pet. App. 10a (“Freddie Mac and the Bank do not

8

Bernard v. Rockhill Dev. Co., 103 Nev. 132, 135, 734 P.2d

1238, 1240 (1987) (quoting Malone v. University of Kansas Medical Center, 220 Kan. 371, 552 P.2d 885, 888 (1976)); see also David

v. Hett, 293 Kan. 679, 270 P.3d 1102, 1114 (2011) (claim sounds

in tort if plaintiffs allege breach of common-law or statutory duty

independent from any contract).

17

seek damages or claim a breach of duty resulting in

injury to person or property, two of the traditional

hallmarks of a torts action.”). This was error as neither

of these “elements” distinguish contract claims from

common law tort claims.9

Both tort and contract definitions include the

word “duty.” Thus, the definitions are not distinct in

terms of duty vs. no duty, but rather where the duty

emanates—law or agreement between the parties. In

that regard, the common law definitions are mutually

exclusive – if the duty does not emanate from agreement between the parties, it is a “wrong independent

of contract”10 and is appropriately characterized as a

tort.

Put simply, where there is no contract between

the parties the action is “strictly and solely ex delicto

[tort].”11 Given the Ninth Circuit’s acknowledgment

that there is no agreement between the parties, the in-

9

In referring to “contract claims” and “tort claims,” Congress

presumably intended common law understandings of those terms

to govern. See United States v. Limbs, 524 F.2d 799, 801 (9th Cir.

1975) (citing United States v. Neidorf, 522 F.2d 916, 919 (9th Cir.

1975)).

10

11

Bernard, 103 Nev. at 135, 734 P.2d at 1240.

Hampton by Hampton v. Fed. Exp. Corp., 917 F.2d 1119,

1123 (8th Cir. 1990) (citing W. Keeton, Prosser and Keeton on the

Law of Torts § 92 (5th ed. 1984)) (emphasis added). See also

Guardian Tr. & Deposit Co. v. Fisher, 200 U.S. 57, 67 (1906) (recognizing actions “where there is no contract … are strictly and

solely actions ex delicto [tort].”); Guardian Tr. & Deposit Co. v.

Greensboro Water Supply Co., 115 F. 184, 189-90 (C.C.W.D.N.C.

1902) (recognizing the common law division of actions as ex contractu (contract) and ex delicto (tort)).

18

quiry should have ended, because without an agreement between the parties, the very definition of a contract action cannot apply.

In addition, the Ninth Circuit was wrong in its

premise that all tort claims assert the violation of

some “duty.” Nevada law provides many examples, including, but not limited to, wrongful foreclosure,12 civil

12

Collins v. Union Fed. Sav. & Loan Ass’n, 99 Nev. 284, 662

P.2d 610 (1983).

19

assault,13 civil battery,14 civil conspiracy,15 false imprisonment,16 fraudulent or intentional misrepresentation,17 nuisance,18 slander of title,19 intentional infliction of emotional distress,20 and probably most notably, intentional interference with a contract.21 Not a

single one of these torts requires duty as an element.

Furthermore, the fact that a claim is “dependent”

in some sense on a contract does not preclude it from

arising in tort law. For example, intentional interference with a contract is a tort despite revolving entirely

around a contract, because what drives the claim is not

13

Prosser and Keeton on Torts, § 10 at 43 (5th ed. 1984); Olivero v. Lowe, 116 Nev. 395, 995 P.2d 1023 (2000).

14

Ashcraft v. King, 278 Cal. Rptr. 900, 228 Cal. App. 3d 604

(1991); see also Olivero, 116 Nev. 395; Prell Hotel Corp. v. Antonacci, 86 Nev. 390, 469 P.2d 399 (1970).

15

Consol. Generator-Nevada, Inc. v. Cummins Engine Co., 114

Nev. 1304, 971 P.2d 1251 (1999); Dow Chemical Co. v. Mahlum,

114 Nev. 1468, 970 P.2d 98 (1998).

16

Hernandez v. City of Reno, 97 Nev. 429, 634 P.2d 668 (1981).

17

Barmettler v. Reno Air, Inc., 114 Nev. 441, 956 P.2d 1382

(1998); Blanchard v. Blanchard, 108 Nev. 908, 839 P.2d 1320

(1992).

18

Culley v. County of Elko, 101 Nev. 838, 711 P.2d 864 (1985).

19

Executive Management, LTD v. Ticor Title Insurance Co.,

114 Nev. 823, 963 P.2d 465 (1998); Higgins v. Higgins, 103 Nev.

443, 744 P.2d 530 (1987).

20

Dillard Dept. Stores, Inc. v. Beckwith, 115 Nev. 372, 989

P.2d 882 (1999); Miller v. Jones, 114 Nev. 1291, 970 P.2d 571

(1998).

21

J.J. Industries, LLC v. Bennett, 119 Nev. 269, 71 P.3d 1264

(2003).

20

the contract itself (although a requisite element), but

rather the act of one interfering with the contract.22

Here, the Bank’s claim is even more tenuously related to the contract. It is not the contract that functions as the basis for the claim; it is the existence of

the federal statute that that serves as the entire basis

of the claim. Without the federal statute, the Bank’s

claim would fail. This is similar to an intentional interference with a contract clam. While the existence of

the contract is required, it is the interference with that

contract on the part of a third party that drives the

claim and without this interference, merely having the

contract would not be enough to prevail on the claim.

And no one would call an interference with contract

claim a “contract claim” rather than a “tort claim.”

In a similar context, the Nevada Supreme Court,

in affirming a dismissal of a breach of contract claim

brought by a purchaser at an HOA foreclosure sale, recently acknowledged “the HOA foreclosure process is

governed strictly by statute, not by two parties entering into negotiations that are consummated by written

agreement.” LN Management LLC Series 3732 Russell

Peterson v. Shadow Hills Master Association, 474 P.3d

333 (Nev. Oct. 16, 2020) (unpublished disposition).

The Nevada Supreme Court further noted, the quintessential requirement for a contract claim is the existence of a contract between the parties. Id. at 2.

22

Stalk v. Mushkin, 125 Nev. 21, 26, 199 P.3d 838, 841 (2009)

(citing Zimmerman v. Bank of America National T. & S. Ass’n,

191 Cal.App.2d 55, 12 Cal.Rptr. 319, 321 (1961))(“The actionable

wrong lies in the inducement to break the contract or to sever the

relationship, not in the kind of contract or relationship so disrupted, whether it is written or oral, enforceable or not enforceable.”).

21

(emphasis added.) Yet, the Court fully acknowledged

“there is no contract between SFR and the plaintiffs…”

Pet.App. 8a.

The court of appeals equally erred in treating a

claim for damages as distinguishing tort and contract

claims. Contract actions equally involve money damages. Nevertheless, simply because the Bank sought

declaratory relief as opposed to money damages does

not mean the claim does not sound in tort, and therefore sounds in contract.23

Likewise, the lack of injury to person or property

does not mean the claim sounds in contract. Again, injury is just an element of some torts, it is not the lynchpin of the common law definition of tort. For example,

trespass does not require actual injury. It requires invasion of a property right. Coming onto property of another is enough to meet that element of trespass. See,

e.g., Dayton Valley Investors, LLC v. Union Pacific R.

Co., 664 F. Supp. 2d 1174, 1190 (D. Nev. 2009). This

would be especially so where the property owner was

merely seeking declaratory relief that the invading

party had no right to be there and to enjoin further

invasion. At any rate, there is injury to property here.

The Bank’s property interest was extinguished by virtue of the Association’s foreclosure sale, and but for the

federal statute, the Bank would have lost its property

interest. Certainly, the loss of a lien interest/money

encumbrance is an injury to property. In fact, this is

23

In any event, the Bank’s declaratory relief still has monetary value. After all, the Bank seeks to insulate a money encumbrance valued in the six figure range.

22

the same injury involved in an intentional interference

with contract claim.24

In the end, the Ninth Circuit put too much emphasis on an artificially narrow definition of tort, when

Congress intended the common law definition to prevail. The court compounded its error by placing great

emphasis on the traditional hallmarks of torts, while

ignoring the “quintessential” hallmark of a contract

action—an actual contract between the parties. See

LN Management, supra. Nothing about the common

law definition of tort deals with damages or injury to

person or property. While these may be elements of

types of torts, they do not make up the common law

definition of tort. Under the common law definitions of

both tort and contract, the Bank’s quiet title claim

sounds in tort, not contract. And, therefore, the proper

statute of limitations is limited to the longer of three

years or the time allowed under state law for the tort.

2. SFR’s position accords with the D.C. Circuit’s

reasoning in Megapulse, Inc. v. Lewis.25 In Megapulse

the D.C. Circuit considered whether a claim sounded

in contract for purposes of establishing if jurisdiction

existed for under the Tucker Act. In doing so, the D.C.

Circuit admonished that “the mere fact that a court

may have to rule on a contract issue does not, by triggering some mystical metamorphosis, automatically

transform an action based upon [tort] into one on the

contract.”26

24

Stalk, supra.

25

672 F.2d 959 (D.C. Cir. 1982).

26

Id.

23

Here, the Ninth Circuit distinguished Megapulse

on the obscure basis the Megapulse Court did not characterize the claim as tort. Pet. App. 10a n.3. But as the

D.C. Circuit recognized, it is important to look beyond

the origin of the relationship, even when one exists between the parties, noting: “[c]ontract issues may arise

in various types of cases where the action itself is not

founded on a contract.”27

The same can be said here. While the origin of

Freddie’s lien interest is the Note, which is a contract,

but other than creating the interest in the Property

that was foreclosed, the contract has nothing to do

with the quiet title claim against SFR that challenges

the effect of the foreclosure sale. Put another way, the

Note does not serve as the basis to challenge the foreclosure sale, instead, the challenge emanates from the

Federal Foreclosure Bar, i.e. emanates from law not a

contract.

Consider this: if the foreclosure sale occurred prior

to the enactment of the Federal Foreclosure Bar,

would the promissory note independently provide this

challenge to the foreclosure sale? The answer is undoubtedly no, despite the promissory note being the

common denominator in that scenario, as well as now.

This distinction is clear and emphasized by Megapulse. This Court’s intervention is needed to prevent

further incursion into state property law and to inform

the lower courts that the existence of a contract, without seeking breach or enforcement does not transform

every action into a contract claim.

27

Id. at 968.

24

C. The Ninth Circuit’s Decision Will Have

Broad And Harmful Consequences.

The Ninth Circuit’s decision demands review because it will dictate the outcome of hundreds, if not

thousands, of cases throughout the western United

States. It means every action brought by or on behalf

of the FHFA which is dependent in some way upon

FHFA’s ownership of a note and deed of trust is entitled to a minimum of a six-year statute of limitations.

For example, in cases decided the same day, the same

panel relied on M&T Bank to give the FHFA and GSEs

the six-year statute of limitations. One of those cases

involves over 80 properties.28 There are scores more

cases pending in federal courts on the same issue

which are all, at this time, subject to the Ninth Circuit’s holding here.

This court reach further, to cases where the time

limit would generally be less, even under HERA. For

example, FHFA or its agents have claimed in some

cases that a purchaser has interfered with the ability

for FHFA to foreclose, thereby interfering with its contract with the borrower. 29 That claim is necessarily

28

See Federal Home Loan Mortgage Corp. v. SFR Investments

Pool 1, LLC, 810 Fed. Appx. 589 (9th Cir. June 25, 2020) (memorandum); see also Bourne Valley Court Trust v. Wells Fargo Bank,

N.A., 810 Fed. Appx. 492 (9th Cir. June 25, 2020) (memorandum).

SFR and Bourne Valley Court Trust are filing a joint petition as

to these two decisions concurrently with the instant petition.

29

See, e.g., Alessi & Koenig, LLC v. Jameson, et al., Case No.

A-15-715129-C (Eighth Judicial Dist. Ct., Clark County, Nevada)

(Answer and Counterclaim of Defendant The Bank of New York

Mellon at p. 20 (June 22, 2015); SFR uses this simply as an example and does not accept or concede that a claim for this cause

25

entirely dependent on the note and deed of trust. Yet,

this cause of action in Nevada carries a three-year

statute of limitations, which would remain three-years

under HERA. NRS 11.190(3)(c); § 4617(b)(12)(A)(ii).

And much less than six years in other Ninth Circuit

states.30

The decision below regarding classifying the quiet

title claim as contract establishes that when FHFA is

involved, the lens through which a court analyzes its

claim must not turn on whether or not there is a mortgage owned by FHFA in some way involved. The mere

fact of ownership (which SFR and Bourne Valley do

not concede for reasons stated in the sections related

to production of the contracts) does not support overturning the otherwise valid sale. Rather, it is the existence of the Federal Foreclosure Bar that gives the

banks, GSEs and FHFA legs in these cases. This continuing and deeper incursion into state law should be

halted.

Further, while the Ninth Circuit was characterizing the claim while interpreting the HERA statute of

limitations, nothing limits its analysis to FHFA suits.

The Circuit’s analysis could bleed over into determining the statute of limitations where FHFA is not involved, using the same reasoning: anyone with an interest in property could restyle their claims to avoid a

shorter statute of limitations, even when breach or enforcement of the contract is not at issue. Or, worse,

of action exists under law against the purchaser at a foreclosure

sale.

30

See, e.g., California, 2-year, Cal. Code Civ. Proc. § 339(1);

Alaska, 2-year, AS § 09.10.070; Arizona, 2-year, A.R.S. § 12-542;

Oregon, 2-year, O.R.S. § 12.110.

26

even when property interests are not at issue. Clever

lawyers could restyle what are otherwise tort claims

into contract claims so long as there is any contract

existing in the background, to attempt to use the

longer statute of limitations. Finally, a defendant

could use the same logic used by the Ninth Circuit here

to shorten the time available to bring an action so long

as there is a contract in the background. For example,

if a tort claim is somehow related to an underlying contract, would a party be barred under the Federal Tort

Claims act because the claim is now one under contract? Or, in Nevada, a claim for wrongful death due

to against the owner of real property could use this

same analysis to say that the tort of wrongful death

due to a construction defect should be deemed a contract claim because of the contract between the homeowner and contractor, such that the plaintiff would

have only six-years to bring an action rather than the

ten allowed by statute.

27

CONCLUSION

For the foregoing reasons, the petition for a writ

of certiorari should be granted.

Respectfully submitted,

Jacqueline A. Gilbert

Diana Cline Ebron

Counsel of Record

KIM GILBERT EBRON

7625 Dean Martin Dr.

Ste. 110

Las Vegas, NV 89139

(702) 400-4130

Jackie@kgelegal.com

December 31, 2020

APPENDIX

1a

APPENDIX A

________________________________

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

M&T BANK; FEDERAL HOME

LOAN MORTGAGE CORPORATION,

Plaintiffs-Appellees,

v.

SFR INVESTMENTS POOL 1, LLC,

Defendant-Appellant,

No. 18-17395

D.C. No.

2:17-cv-01867JCM-CWH

OPINION

and

DIAMOND CREEK COMMUNITY

ASSOCIATION, a Nevada NonProfit Corporation,

Defendant.

Appeal from the United States District Court

for the District of Nevada

James C. Mahan, District Judge, Presiding

Argued and Submitted June 9, 2020

San Francisco, California

Filed June 25, 2020

___________________________

2a

Before: Milan D. Smith, Jr. and Andrew D. Hurwitz,

Circuit Judges, and C. Ashley Royal,* District Judge.

Opinion by Judge Hurwitz

___________________________

SUMMARY**

___________________________

Federal Foreclosure Bar / Statute of Limitations

The panel affirmed the district court’s summary

judgment in favor of plaintiffs Federal Home Loan

Mortgage Corporation (“Freddie Mac”) and M&T Bank

in a quiet title action concerning foreclosed real property in Nevada.

The Housing and Economic Recovery Act

(“HERA”) created the Federal Housing Finance

Agency (“FHFA”) to regulate Freddie Mac and other

lending agencies, and enacted the Federal Foreclosure

Bar, 12 U.S.C. § 4617(j)(3) (providing that no property

of FHFA shall be subject to foreclosure without the

consent of the FHFA, nor shall any involuntary lien

attach to the property of the FHFA).

The panel held that under 12 U.S.C. § 4617(b)(12),

a quiet title action is a “contract” claim that is subject

to a statute of limitations of at least six years. The

panel further held that Freddie Mac and M&T Bank

timely filed their quiet title action within six years of

the foreclosure sale; and Freddie Mac’s deed of trust,

*

The Honorable C. Ashley Royal, United States District

Judge for the Middle District of Georgia, sitting by designation.

**

This summary constitutes no part of the opinion of the court.

It has been prepared by court staff for the convenience of the

reader.

3a

which had been placed under the conservatorship of

FHFA, survived a non-judicial foreclosure sale of a Nevada residential property to satisfy a homeowners association superpriority lien.

The panel held that although Freddie Mac and the

Bank were not assignees of the FHFA, Freddie Mac

was under the FHFA conservatorship, and the FHFA

thus had all the rights of Freddie Mac with respect to

its assets. The panel also held that although there was

no contract between the purchaser and the plaintiffs,

the quiet title claims were entirely “dependent” upon

Freddie Mac’s lien on the property, an interest created

by contract.

***

OPINION

HURWITZ, Circuit Judge:

The sole contested issue in this appeal is whether

under 12 U.S.C. § 4617(b)(12), a quiet title action is a

“contract” claim or a “tort” claim. If it is the former,

this action is subject to a statute of limitations of at

least six years, was timely filed, and the plaintiffs are

entitled to summary judgment. We conclude that the

statute of limitations applicable to a “contract” claim

under 12 U.S.C. § 4617(b)(12)(A)(i) applies and affirm

the judgment of the district court.

I.

Nevada law grants a homeowners association

(“HOA”) a “superpriority” lien on a property for unpaid

assessments; that lien is superior even to a previously

recorded first deed of trust. See Nev. Rev. Stat.

§ 116.3116; Bank of Am., N.A. v. Arlington W. Twilight

Homeowners Ass’n, 920 F.3d 620, 621–22 (9th Cir.

4a

2019) (per curiam). But, the “Federal Foreclosure

Bar,” 12 U.S.C. § 4617(j)(3), provides that “[n]o property of the [Federal Housing Finance Agency] shall be

subject to levy, attachment, garnishment, foreclosure,

or sale without the consent of the Agency, nor shall

any involuntary lien attach to the property of the

Agency.” The Federal Foreclosure Bar preempts the

Nevada superpriority lien scheme. See Berezovsky v.

Moniz, 869 F.3d 923, 931 (9th Cir. 2017).

The underlying question in this case is whether a

first deed of trust in favor of the Federal Home Loan

Mortgage Corporation (“Freddie Mac”), which had

been placed under the conservatorship of the Federal

Housing Finance Agency (“FHFA”), survived a non-judicial foreclosure sale of a Nevada residential property

to satisfy an HOA superpriority lien. That question

turns on whether plaintiffs timely filed this action.

II.

The background facts are undisputed and largely

a matter of public record. The story begins in November 2006, when an individual purchased a home in Las

Vegas (“the Property”) with a loan of approximately

$200,000 from Universal American Mortgage Company LLC. The loan was secured by a first deed of

trust. In January 2007, Freddie Mac acquired the loan

and deed of trust.

In response to the 2008 financial crisis, Congress

enacted the Housing and Economic Recovery Act

(“HERA”), Pub. L. No. 110–289, 122 Stat. 2654 (codified at 12 U.S.C. § 4511 et seq.), which created the

FHFA to regulate Freddie Mac and other lending

agencies. In 2008, the FHFA placed Freddie Mac into

conservatorship. As conservator, the FHFA has “all

5a

rights, titles, powers, and privileges” of Freddie Mac.

12 U.S.C. § 4617(b)(2)(A)(i). HERA also enacted the

Federal Foreclosure Bar. Id. at § 4617(j)(3).

The Property was sold on July 20, 2012 at a nonjudicial foreclosure sale to SFR Investments Pool 1,

LLC, for $5,200 to satisfy unpaid assessments by the

Diamond Creek Community Association, an HOA. The

FHFA, however, never consented to the extinguishment of the first deed of trust through the 2012 foreclosure sale. Therefore, in July 2017, Freddie Mac and

M&T Bank, to whom Freddie Mac had assigned the

deed of trust under a servicing agreement in May

2012,1 filed this action, seeking to quiet title in the

Property and requesting a judgment that the first deed

of trust remained enforceable. The complaint asserted

that the deed of trust had not been extinguished because of the Federal Foreclosure Bar and because the

FHFA had never consented to the foreclosure sale.

SFR moved to dismiss the complaint, claiming

that it was time-barred under the three-year statute

of limitations applicable to “tort” claims in 12 U.S.C.

§ 4617(b)(12)(A)(ii). In response, Freddie Mac and the

Bank contended that the governing statute of limitations was the five-year statute in Nevada Revised

Statutes (“N.R.S”) § 11.070 applicable to “an action,

founded upon the title to real property.”

1

The relationship between Freddie Mac and M&T Bank is

governed by Freddie Mac’s Single-Family Seller/Servicer Guide,

which provides that Freddie Mac’s servicer may serve as record

beneficiary for a deed of trust owned by Freddie Mac but must

assign the deed of trust back to Freddie Mac upon Freddie Mac’s

demand. See Berezovsky, F.3d at 932–33.

6a

The district court found that the state statute applied and that the action was timely because it was

filed within five years of the HOA foreclosure sale. The

court later granted summary judgment to Freddie Mac

and the Bank, finding that because the FHFA never

consented to the foreclosure sale, Freddie Mac’s interest in the Property through the deed of trust survived

under the Federal Foreclosure Bar. SFR timely appealed.

We have jurisdiction under 28 U.S.C. § 1291 and

review the summary judgment de novo. Fed. Home

Loan Mortg. Corp. v. SFR Invs. Pool 1, LLC, 893 F.3d

1136, 1144 (9th Cir. 2018). We “may affirm a summary

judgment on any ground finding support in the record.” Cairns v. Franklin Mint Co., 292 F.3d 1139, 1155

n.14 (9th Cir. 2002) (quoting Karl Storz EndoscopyAm., Inc. v. Surgical Techs., Inc., 285 F.3d 848, 855

(9th Cir. 2002)).

III.

Although Freddie Mac and the Bank relied on

N.R.S. § 11.070 below, on appeal all parties—and the

FHFA as amicus—agree that the HERA statute of limitations, 12 U.S.C. § 4617(b)(12)(A), controls.2 That is

correct.

2

“Although the general rule in this circuit is that an appellate court will not consider an issue raised for the first time on

appeal, we will reach the question if it is purely one of law and

the opposing party will suffer no prejudice because of failure to

raise it in the district court.” United States v. Thornburg, 82 F.3d

886, 890 (9th Cir. 1996). This case presents a purely legal issue

that SFR treated extensively in its briefs, so we consider plaintiffs’ argument regarding whether the action was time-barred under the federal statute. See id.

7a

In relevant part, HERA provides that the statute

of limitations for “any action brought by the [FHFA]

as conservator . . . shall be”:

(i) in the case of any contract claim, the longer

of—

(I) the 6-year period beginning on the date

on which the claim accrues; or

(II) the period applicable under State law;

and

(ii) in the case of any tort claim, the longer of—

(I) the 3-year period beginning on the date

on which the claim accrues; or

(II) the period applicable under State law.

12 U.S.C. § 4617(b)(12)(A). Although the statute refers

to “any action brought by the [FHFA] as conservator,”

id., it applies here even though the plaintiffs are Freddie Mac and the Bank, its loan servicer.

In FDIC v. Bledsoe, the Fifth Circuit held that

that a similarly worded statute of limitations—facially

applying only to actions brought by a federal agency—

also applied to actions brought by a private entity acting as an assignee for the federal agency. 989 F.2d 805,

809–11 (5th Cir. 1993). The Court found that the common law was “loud and consistent,” in providing that

“an assignee stands in the shoes of his assignor, deriving the same but no greater rights and remedies than

the assignor then possessed” and therefore receives

the same limitations period as the assignor. Id. at 810

(cleaned up). We adopted the Fifth Circuit’s reasoning

in United States v. Thornburg, 82 F.3d 886, 891 (9th

Cir. 1996).

8a

We reach the same conclusion here. Although

Freddie Mac and the Bank are not assignees of the

FHFA, Freddie Mac is under the FHFA conservatorship, and the FHFA thus has “all rights, titles, powers, and privileges” of Freddie Mac “with respect to

[its] . . . assets.” 12 U.S.C. § 4617(b)(2)(A)(i). Like an

assignee, Freddie Mac thus “stands in the shoes of” the

FHFA with respect to its current claims to quiet title

to the deed of trust, which is property of the conservatorship. Bledsoe, 989 F.2d at 809; see Thornburg, 82

F.3d at 891. M&T Bank, Freddie Mac’s assignee,

stands in the same shoes as its assignor. See Bledsoe,

989 F.2d at 809; Thornburg, 82 F.3d at 891.

IV.

Although § 4617(b)(12)(A) only explicitly addresses “tort” and “contract” claims, it applies to all

claims brought by the FHFA as conservator. See 12

U.S.C. § 4617(b)(12)(A) (stating that it “provides”

what “the statute of limitations” “shall be” for “any action brought by the [FHFA] as conservator”). “By using

these words, Congress precluded the possibility that

some other limitations period might apply to claims

brought by FHFA as conservator.” Fed. Hous. Fin.

Agency v. UBS Ams. Inc., 712 F.3d 136, 142 (2d Cir.

2013); cf. Nat’l Credit Union Admin. Bd. v. RBS Sec.,

Inc., 833 F.3d 1125, 1131 (9th Cir. 2016) (“By expressly

stating that ‘the’ statute of limitations for ‘any action’

brought by the NCUA as conservator or liquidating

agent ‘shall be’ as specified, Congress made clear that

no other limitations period applies to the NCUA’s

claims.”). Thus, if neither description is a perfect fit,

we must decide when applying the statute whether a

claim is better characterized as sounding in contract

or in tort.

9a

We conclude that the claims in this action are

“contract” claims under 12 U.S.C. § 4617(b)(12)(A)(i).

Although there is no contract between SFR and the

plaintiffs, the quiet title claims are entirely “dependent” upon Freddie Mac’s lien on the Property, an interest created by contract. See Stanford Ranch, Inc. v.

Md. Cas. Co., 89 F.3d 618, 625 (9th Cir. 1996) (“If a

claim is dependent upon the existence of an underlying contract, the claim sounds in contract, as opposed

to tort.”) (applying California law); see also Smith v.

FDIC, 61 F.3d 1552, 1561 (11th Cir. 1995) (“[B]ecause

a mortgage lien is an interest in property created by

contract, an action to enforce that lien is clearly a contract action.”). Freddie Mac and the Bank do not seek

damages or claim a breach of duty resulting in injury

to person or property, two of the traditional hallmarks

of a torts action. See United States v. Burke, 504 U.S.

229, 234–35 (1992); Prudential Ins. Co. of Am. v. L.A.

Mart, 68 F.3d 370, 375 (9th Cir. 1995).

Indeed, even if the question were closer, we would

still choose the longer contract limitations period.

“When choosing between multiple potentially-applicable statutes, as a matter of federal policy the longer

statute of limitations should apply.” Wise v. Verizon

Commc’ns, Inc., 600 F.3d 1180, 1187 n.2 (9th Cir.

2010) (cleaned up); see Fed. Deposit Ins. Corp. v. Former Officers & Dirs. of Metro. Bank, 884 F.2d 1304,

1307 (9th Cir. 1989) (“This circuit has held, however,

that when there is a ‘substantial question’ which of

10a

two conflicting statutes of limitations to apply, the

court should apply the longer.”).3

We therefore conclude that plaintiffs had at least

six years to bring their claims after the foreclosure

sale. Because less than six years transpired between

the accrual of the cause of action in 2012 on the date

of the foreclosure sale and the filing of this suit in

2017, the suit was not time-barred. The judgment of

the district court is AFFIRMED.4

3

Contrary to SFR’s contentions, Megapulse, Inc. v. Lewis,

which stated that “the mere existence of . . . contract-related issues” does not “convert this action to one based on the contract,”

does not compel a contrary result. 672 F.2d 959, 969 (D.C. Cir.

1982). The issue in Megapulse was whether the claim presented

was “clearly” a contract claim over which “the Court of Claims

has exclusive jurisdiction.” Id. at 967, 968. And, although the

D.C. Circuit did not find that the claim at issue was “clearly” a

contract claim, it also did not find that the claim sounded in tort.

See id. at 971.

4

We grant SFR’s unopposed motion for judicial notice of orders in five cases before the Eighth Judicial District of the State

of Nevada.

11a

APPENDIX B

________________________________

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

M&T BANK, et al.,

Plaintiffs,

v.

SFR INVESTMENTS POOL 1,

LLC, et al.,

Defendants.

Case No.

2:17-cv-01867JCM-CWH

ORDER

Presently before the court is defendant SFR Investments Pool 1, LLC’s (“SFR”) motion for reconsideration. (ECF No. 92). Plaintiffs Federal Home Loan

Mortgage Corporation (“Freddie Mac”) and M&T Bank

(“M&T”) (collectively “plaintiffs”) filed a response

(ECF No. 97), to which SFR replied (ECF No. 98).

Also before the court is plaintiffs’ motion for leave

to file surreply. (ECF No. 99). SFR filed a response

(ECF No. 100), to which plaintiffs replied (ECF No.

101).

I.

Facts

This action arises from a dispute over real property located at 8186 Deadwood Bend court, Las Vegas,

Nevada 89178 (“the property”). (ECF No. 1).

Ronald Franke purchased the property on or

about November 2, 2006. (ECF No. 28-2). Franke financed the purchase with a loan in the amount of

$202,250.00 from Universal American Mortgage Company, LLC (“Universal”). Id. Universal secured the

12a

loan with a deed of trust, which names Universal as

the lender, Stewart Title Company as the trustee, and

Mortgage Electronic Registration Systems, Inc.

(“MERS”) as the beneficiary as nominee for the lender

and lender’s successors and assigns. Id.

On January 5, 2007, Freddie Mac purchased the

loan, thereby obtaining a property interest in the deed

of trust. (ECF No. 22). On May 23, 2012, MERS assigned the deed of trust to M&T, Freddie Mac’s authorized servicer of the loan. (ECF Nos. 22, 28-12).

On June 24, 2011, Diamond Creek Community

Association (“Diamond Creek”), through its agent

Alessi & Koenig, LLC (“A&K”), recorded a notice of delinquent assessment lien (“the lien”) against the property for Franke’s failure to pay Copper Creek in the

amount of $930.00. (ECF No. 28-8). On December 1,

2011, Diamond Creek recorded a notice of default and

election to sell pursuant to the lien, stating that the

amount due was $2,105.00 as of November 7, 2011.

(ECF No. 28-9).

On May 7, 2012, Diamond Creek recorded a notice

of foreclosure sale against the property. (ECF No. 2811). On July 20, 2012, Diamond Creek sold the property in a nonjudicial foreclosure sale to SFR in exchange for $5,200.00. (ECF No 28-13). On July 24,

2012, SFR recorded the deed of foreclosure with the

Clark County recorder’s office. Id.

On July 7, 2017, Freddie Mac and M&T filed a

complaint, alleging four causes of action: (1) declaratory relief under 12 U.S.C. § 4617(j)(3) against SFR;

(2) quiet title under 12 U.S.C. § 4617(j)(3) against

SFR; (3) declaratory relief under the Fifth and Fourteenth Amendments against all defendants; and (4)

13a

quiet title under the Fifth and Fourteenth Amendments against SFR. (ECF No. 1).

On November 15, 2018, the court granted plaintiffs’ motion for summary judgment (ECF No. 21),

holding that the foreclosure sale did not extinguish the

deed of trust. (ECF No. 90). The court also declined to

grant SFR Federal Rule of Civil Procedure 56(d) relief

because the evidence before the court was sufficient to

preclude a genuine dispute of material fact pertaining

to Freddie Mac’s interest in the deed of trust. Id. On

that same day, the clerk entered judgment. (ECF No.

91).

On December 13, 2018, SFR filed a motion for reconsideration, arguing that new evidence shows that

there is a genuine dispute of material fact with respect

to Freddie Mac’s interest in the deed of trust. (ECF No.

92). On December 17, 2018, SFR appealed to the Ninth

Circuit. (ECF No. 93). On January 8, 2019, plaintiffs

moved for leave to file a surreply in opposition to SFR’s

motion for reconsideration. (ECF No. 99).

II. Legal Standard

A motion for reconsideration “should not be

granted, absent highly unusual circumstances.”

Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH

& Co., 571 F.3d 873, 880 (9th Cir. 2009). “Reconsideration is appropriate if the district court (1) is presented

with newly discovered evidence, (2) committed clear

error or the initial decision was manifestly unjust, or

(3) if there is an intervening change in controlling

law.” School Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255,

1263 (9th Cir. 1993).

Rule 59(e) “permits a district court to reconsider

and amend a previous order,” however “the rule offers

14a

an extraordinary remedy, to be used sparingly in the

interests of finality and conservation of judicial resources.” Carroll v. Nakatani, 342 F.3d 934, 945 (9th

Cir. 2003) (internal quotations omitted). A motion for

reconsideration is also an improper vehicle “to raise

arguments or present evidence for the first time when

they could reasonably have been raised earlier in litigation.” Marlyn Nutraceuticals, 571 F.3d at 880

III. Discussion

As a preliminary matter, plaintiffs seek to file a

surreply in response to an argument that SFR raised

for the first time in its reply brief. (ECF No. 99). Because “motions for leave to file a surreply are discouraged[,]” the court will deny BNYM’s motion. LR 7-2(b).

The court will also disregard all arguments that SFR

raised for the first time in its reply brief. See United

States v. Wright, 215 F.3d 1020, 1030 n.3 (9th Cir.

2000) (declining to consider arguments raised for the

first time in a reply brief)

SFR argues in its motion for reconsideration that

the court should reverse its November 15, 2018, order

because new evidence in the form of plaintiffs’ deposition testimony creates a genuine dispute of material

fact. (ECF No. 92). The court disagrees.

Before the court granted summary judgment in

plaintiffs’ favor, SFR argued that the evidence before

the court was inadmissible and insufficient to show

that Freddie Mac had an ownership interest in the

deed of trust. (ECF Nos. 25, 29, 48). The evidence in

dispute was the declaration of Dean Meyer, who is director of loss mitigation at Freddie Mac. (ECF No. 22).

SFR also requested that the court allow further discovery into Freddie Mac’s ownership interest in the

15a

deed of trust before adjudicating plaintiffs’ motion for

summary judgment. (ECF No. 29).

The court denied SFR’s request and held that the

declaration of Dean Meyer was sufficient to allow the

court to summarily hold that Freddie Mac had an ownership interest in the deed of trust. (ECF No. 90). Now,

SFR is improperly attempting to rehash an old argument by once again asserting that the declaration of

Dean Meyer cannot support summary judgment. See

Phillips v. C.R. Bard. Inc., 290 F.R.D. 615, 670

(D. Nev. 2013) (“Motions for reconsideration are not

the proper vehicles for rehashing old arguments”).

Moreover, the court has examined the new evidence that SFR attached to its motion and does not

find any genuine dispute of material fact. Dean Meyer

unequivocally stated in his declaration that Freddie

Mac owns the deed of trust and attached database

printouts in support of his claims. (ECF No. 22). Nothing in the record substantially challenges Dean

Meyer’s declaration.

The court also reiterates that federal district

courts routinely rely on materially identical business

records to summarily hold that Freddie Mac owns a

deed of trust. See e.g. G&P Investment Enterprises,

LLC v. Wells Fargo Bank, N.A., 199 F. Supp. 3d 1266,

1267 (D. Nev. 2016); see also Berezovsky v. Moniz, No.

2:15-cv-01186-GMN-GWF, 2015 WL 8780198, at *1

(D. Nev. Dec. 15, 2015). The Ninth Circuit has affirmed several of those decisions. See, e.g., Berezovsky

v. Moniz, 869 F.3d 923 (9th Cir. 2017); see also, e.g.,

Williston Inv. Grp., LLC v. JP Morgan Chase Bank,

NA, 736 F. App’x. 168 (9th Cir. 2018).

16a

In consideration of the foregoing, the court was

correct to adjudicate plaintiffs’ motion for summary

judgment because (1) additional discovery would not

assist in avoiding summary judgment and (2) there is

no genuine dispute of material fact with regards to

Freddie Mac’s ownership interest in the deed of trust.

See Fed. Nat’l Mortgage Ass’n v. KK Real Estate Inv.

Fund, No. 2:17-cv-1289-JCM-CWH, 2018 WL 525297

at *5 (D. Nev. Jan. 23, 2018) (declining Rule 56(d) relief and entering summary judgment in circumstances

materially identical to this case).

IV. Conclusion

In light of the foregoing, the court will deny SFR’s

motion for reconsideration pursuant to Rule 62.1(a).

Fed. R. Civ. P. 62.1(a) (providing that a district court

can deny a motion for relief despite a pending appeal

of the underlying order).

Accordingly,

IT IS HEREBY ORDERED, ADJUDGED, and

DECREED that SFR’s motion for reconsideration

(ECF No. 92) be, and the same hereby is, DENIED.

IT IS FURTHER ORDERED that plaintiffs’ motion for leave to file surreply (ECF No. 99) be, and the

same hereby is, DENIED.

DATED THIS 10th day of April 2019.

/s/

JAMES C. MAHAN

UNITED STATES DISTRICT JUDGE

17a

APPENDIX C

________________________________

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

M&T BANK, et al.,

Plaintiff(s),

v.

SFR INVESTMENTS POOL 1,

LLC, et al.,

Defendant(s).

Case No.

2:17-CV-01867

JCM (CWH)

ORDER

Presently before the court is plaintiffs Federal

Home Loan Mortgage Corporation (“Freddie Mac”)

and M&T Bank’s (“M&T”) motion for summary judgment. (ECF No. 21). Defendant/counter claimant/cross

claimant SFR Investments Pool 1, LLC (“SFR”) filed a

response (ECF No. 28), to which Freddie Mac and

M&T replied (ECF No. 43).

Also before the court is SFR’s motion for relief pursuant to Federal Rule of Civil Procedure 56(d). (ECF

No. 29). Freddie Mac and M&T filed a response (ECF

No. 43), to which SFR replied (ECF No. 47).

Also before the court is SFR’s motion to strike

(ECF No. 48). Freddie Mac and M&T filed a response

(ECF No. 52), to which SFR replied (ECF No. 55).

I.

Facts

This action arises from a dispute over real property located at 8186 Deadwood Bend court, Las Vegas,

Nevada 89178 (“the property”). (ECF No. 1).

18a

Ronald Franke purchased the property on or

about November 2, 2006. (ECF No. 28-2). Franke financed the purchase with a loan in the amount of

$202,250.00 from Universal American Mortgage Company, LLC (“Universal”). Id. Universal secured the

loan with a deed of trust, which names Universal as

the lender, Stewart Title Company as the trustee, and

Mortgage Electronic Registration Systems, Inc.

(“MERS”) as the beneficiary as nominee for the lender

and lender’s successors and assigns. Id.

On January 5, 2007, Freddie Mac purchased the

loan, thereby obtaining a property interest in the deed

of trust. (ECF No. 22). On May 23, 2012, MERS assigned the deed of trust to M&T, Freddie Mac’s authorized servicer of the loan. (ECF Nos. 22, 28-12).

On June 24, 2011, Diamond Creek Community

Association (“Diamond Creek”), through its agent

Alessi & Koenig, LLC (“A&K”), recorded a notice of delinquent assessment lien (“the lien”) against the property for Franke’s failure to pay Copper Creek in the

amount of $930.00. (ECF No. 28-8). On December 1,

2011, Diamond Creek recorded a notice of default and

election to sell pursuant to the lien, stating that the

amount due was $2,105.00 as of November 7, 2011.

(ECF No. 28-9).

On May 7, 2012, Diamond Creek recorded a notice

of foreclosure sale against the property. (ECF No. 2811). On July 20, 2012, Diamond Creek sold the property in a nonjudicial foreclosure sale to SFR in exchange for $5,200.00. (ECF No 28-13). On July 24,

2012, SFR recorded the deed of foreclosure with the

Clark County recorder’s office. Id.

19a

On July 7, 2017, Freddie Mac and M&T filed a

complaint, alleging four causes of action: (1) declaratory relief under 12 U.S.C. § 4617(j)(3) against SFR;

(2) quiet title under 12 U.S.C. § 4617(j)(3) against

SFR; (3) declaratory relief under the Fifth and Fourteenth Amendments against all defendants; and (4)

quiet title under the Fifth and Fourteenth Amendments against SFR. (ECF No. 1).

Now, Freddie Mac and M&T move for summary

judgment, requesting that the court hold that the foreclosure sale did not extinguish the deed of trust. (ECF

No. 21).

II. Legal Standard

The Federal Rules of Civil Procedure allow summary judgment when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that “there is

no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law.” Fed.

R. Civ. P. 56(a). A principal purpose of summary judgment is “to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317,

323–24 (1986).

For purposes of summary judgment, disputed factual issues should be construed in favor of the nonmoving party. Lujan v. Nat’l Wildlife Fed., 497 U.S. 871,

888 (1990). However, to withstand summary judgment, the nonmoving party must “set forth specific

facts showing that there is a genuine issue for trial.”

Id.

In determining summary judgment, a court applies a burden-shifting analysis. “When the party moving for summary judgment would bear the burden of

20a

proof at trial, it must come forward with evidence

which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the

moving party has the initial burden of establishing the

absence of a genuine issue of fact on each issue material to its case.” C.A.R. Transp. Brokerage Co. v.

Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000)

(citations omitted).

By contrast, when the nonmoving party bears the

burden of proving the claim or defense, the moving

party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party’s case; or (2) by demonstrating that the

nonmoving party failed to make a showing sufficient

to establish an element essential to that party’s case

on which that party will bear the burden of proof at

trial. See Celotex Corp., 477 U.S. at 323–24. If the moving party fails to meet its initial burden, summary

judgment must be denied and the court need not consider the nonmoving party’s evidence. See Adickes v.

S.H. Kress & Co., 398 U.S. 144, 159–60 (1970).

If the moving party satisfies its initial burden, the

burden then shifts to the opposing party to establish

that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.

574, 586 (1986). The opposing party need not establish

a dispute of material fact conclusively in its favor. See

T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n,

809 F.2d 626, 631 (9th Cir. 1987). It is sufficient that

“the claimed factual dispute be shown to require a jury

or judge to resolve the parties’ differing versions of the

truth at trial.” Id.

In other words, the nonmoving party cannot avoid

summary judgment by relying solely on conclusory

21a

allegations that are unsupported by factual data. See

Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions

and allegations of the pleadings and set forth specific

facts by producing competent evidence that shows a

genuine issue for trial. See Celotex, 477 U.S. at 324.

At summary judgment, a court’s function is not to

weigh the evidence and determine the truth, but to determine whether a genuine dispute exists for trial. See

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249

(1986). The evidence of the nonmovant is “to be believed, and all justifiable inferences are to be drawn in

his favor.” Id. at 255. But if the evidence of the nonmoving party is merely colorable or is not significantly

probative, summary judgment may be granted. See id.

at 249–50.

III. Discussion

As a preliminary matter, the court will deny SFR’s

motion for relief under Rule 56(d) (ECF No. 29) and

motion to strike (ECF No. 48) because these motions

are based on the erroneous contention that the evidence before the court is inadmissible and does not

show that Freddie Mac owns the deed of trust. (ECF

Nos. 29, 48).

Here, Freddie Mac and M&T have provided the

court with the declaration of Dean Meyer, who is director of loss mitigation at Freddie Mac. (ECF No. 22).

In the declaration, Dean Meyer testified that Freddie

Mac owns the deed of trust and attached database

printouts in support of those claims. Id. Courts regularly rely on this kind of evidence at summary judgment to hold that Freddie Mac owns a deed of trust.

See e.g. G&P Investment Enterprises, LLC v. Wells

22a

Fargo Bank, N.A., 199 F. Supp. 3d 1266, 1267 (D. Nev.

2016); see also Berezovsky v. Moniz, No. 2:15-cv-01186GMN-GWF, 2015 WL 8780198, at *1 (D. Nev. Dec. 15,

2015), aff’d, 869 F.3d 923 (9th Cir. 2017). Accordingly,

SFR has failed to show good cause to strike the declaration (ECF No. 22) or delay adjudication of Freddie

Mac and M&T’s motion for summary judgment (ECF

No. 21).

As to the pending motion for summary judgment,

Freddie Mac and M&T argue that the court should set

aside the foreclosure sale because 12 U.S.C.

§ 4617(j)(3) (“the federal foreclosure bar”) preempts

contrary state law. (ECF No. 21).

The Housing and Economic Recovery Act

(“HERA”) established Federal Housing Finance

Agency (“FHFA”) to regulate Fannie Mae, Freddie

Mac, and Federal Home Loan Banks. See Pub. L. No.

110–289, 122 Stat. 2654, codified at 12 U.S.C. § 4511

et seq. In September 2008, FHFA placed Fannie Mae

and Freddie Mac into conservatorships “for the purpose of reorganizing, rehabilitating, or winding up

[their] affairs.” 12 U.S.C. § 4617(a)(2). As conservator,

FHFA immediately succeeded to “all rights, titles,

powers, and privileges” of Fannie Mae and Freddie

Mac. 12 U.S.C. § 4617(b)(2)(A)(i). Moreover, Congress

granted FHFA exemptions to carry out its statutory

functions—specifically, in acting as conservator, “[n]o

property of [FHFA] shall be subject to levy, attachment, garnishment, foreclosure, or sale without the

consent of [FHFA], nor shall any involuntary lien attach to the property of [FHFA].” 12 U.S.C. § 4617(j)(3).

In Skylights LLC v. Fannie Mae, 112 F. Supp. 3d

1145 (D. Nev. 2015), the court addressed the applicability of 12 U.S.C. § 4617(j)(3) and held that the plain

23a

language of § 4617(j)(3) prohibits property of FHFA

from being subjected to a foreclosure without its consent. See also Saticoy Bay, LLC v. Fannie Mae, No.

2:14-CV-01975-KJD-NJK, 2015 WL 5709484 (D. Nev.

Sept. 29, 2015) (holding that 12 U.S.C. § 4617(j)(3)

preempts NRS 116.3116 to the extent that a HOA’s

foreclosure of its super-priority lien cannot extinguish

a property interest of Fannie Mae while those entities

are under FHFA’s conservatorship).

Since Skylights, this court has consistently held

that 12 U.S.C. § 4617(j)(3) prohibits property of FHFA

from foreclosure absent agency consent. See, e.g., 1597

Ashfield Valley Trust v. Fed. Nat. Mortg. Ass’n System,

case no. 2:14-cv-02123-JCM-CWH, 2015 WL 4581220,

at *7 (D. Nev. July 28, 2015). Recently, the Ninth Circuit also held that the federal foreclosure bar applies

to private foreclosure sales and “supersedes the Nevada superpriority lien provision.” See Berezovsky v.

Moniz, 869 F.3d 923, 929, 931 (9th Cir. 2017).

Here, Freddie Mac acquired ownership of the underlying loan on January 5, 2007. (ECF No. 22). Further, on May 23, 2012, M&T acquired all beneficial interest in the deed of trust via an assignment. (ECF No.

28-12). M&T acted as a contractually authorized servicer of the loan on behalf of Freddie Mac, the owner

of the note. Pursuant to § 4617(b)(2)(A)(i), FHFA, as

conservator, immediately succeeded to all rights, titles, powers, and privileges of plaintiff. See 12 U.S.C.

§ 4617(b)(2)(A)(i). Therefore, FHFA held an interest in

the deed of trust as conservator for plaintiff prior to

the foreclosure sale on July 20, 2012.

FHFA did not consent to the extinguishment of

Freddie Mac’s property interest through the foreclosure sale. SFR argues that FHFA has affirmative

24a

rights and duties, and a failure to appear at the foreclosure sale or pay the superpriority lien prior to the

sale constituted consent to the foreclosure. See (ECF

No. 28). However, pursuant to the Ninth Circuit’s recent decision in Berezovsky, § 4617(j) imposes no such

duties on the FHFA, and the plain language of

§ 4617(j)(3) prevents a foreclosure sale pursuant to

NRS 116.3116 et seq. from extinguishing the deed of

trust. See Berezovsky, 869 F.3d at 929, 931.

Freddie Mac obtained its interest in the property

prior to the foreclosure sale. As Freddie Mac was subject to conservatorship at the time of the alleged foreclosure, and the agency did not consent to foreclosure,

Freddie Mac’s interest in the property survived the

foreclosure sale. Thus, Freddie Mac and M&T are entitled to summary judgment on their declaratory relief

and quiet title claims.1

IV. Conclusion

Accordingly,

IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that Freddie Mac and M&T’s motion for

summary judgment (ECF No. 21) be, and the same

hereby is, GRANTED.

IT IS FURTHER ORDERED that SFR’s motion

for relief under Federal Rule of Civil Procedure 56(d)

(ECF No. 29) be, and the same hereby is, DENIED.

1

The court will not address Freddie Mac and M&T’s quiet title and declaratory relief claims under the Fifth and Fourteenth

Amendments, which appear to be pled in the alternative and are

not pertinent to the adjudication of this action.

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IT IS FURTHER ORDERED that SFR’s motion to

strike (ECF No. 48) be, and the same hereby is, DENIED.

The clerk shall enter judgment accordingly and

close the case.

DATED November 15, 2018.

/s/

UNITED STATES DISTRICT JUDGE

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APPENDIX D

________________________________

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

M&T BANK; FEDERAL

HOME LOAN MORTGAGE

CORPORATION,

Plaintiffs-Appellees,

v.

SFR INVESTMENTS POOL

1, LLC,

Defendant-Appellant.

No. 18-17395

D.C. No. 2:17-cv01867-JCM-CWH

District of Nevada,

Las Vegas

ORDER

and

DIAMOND CREEK

COMMUNITY

ASSOCIATION, a Nevada

Non-Profit Corporation,

Defendant.

Filed Aug. 4, 2020

___________________________

Before: M. SMITH and HURWITZ, Circuit Judges,

and ROYAL,* District Judge.

The panel has voted to deny the petition for panel

rehearing. Judges M. Smith and Hurwitz have voted

*

The Honorable C. Ashley Royal, United States District

Judge for the Middle District of Georgia, sitting by designation.

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to deny the petition for rehearing en banc, and Judge

Royal so recommends.

The full court has been advised of the petition for

rehearing en banc and no judge has requested a vote

on whether to rehear the matter en banc. Fed. R. App.

P. 35.

The petition for panel rehearing and rehearing en

banc, Dkt. 65, is DENIED.

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APPENDIX E

________________________________

12 U.S.C. § 4617 provides in relevant part:

§ 4617. Authority over critically undercapitalized

regulated entities

* * *

(b) Powers and duties of the Agency as conservator or receiver

* * *

(2) General powers

(A) Successor to regulated entity

The Agency shall, as conservator or receiver,

and by operation of law, immediately succeed to—

(i) all rights, titles, powers, and privileges

of the regulated entity, and of any stockholder,

officer, or director of such regulated entity

with respect to the regulated entity and the assets of the regulated entity; and

(ii) title to the books, records, and assets of

any other legal custodian of such regulated entity.

* * *

(12) Statute of limitations for actions brought

by conservator or receiver

(A) In general

Notwithstanding any provision of any contract, the applicable statute of limitations with

regard to any action brought by the Agency as

conservator or receiver shall be—

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(i) in the case of any contract claim, the

longer of—

(I) the 6-year period beginning on the

date on which the claim accrues; or

(II) the period applicable under State

law; and

(ii) in the case of any tort claim, the longer

of—

(I) the 3-year period beginning on the

date on which the claim accrues; or

(II) the period applicable under State law.

(B) Determination of the date on which a

claim accrues

For purposes of subparagraph (A), the date on

which the statute of limitations begins to run on

any claim described in such subparagraph shall

be the later of—

(i) the date of the appointment of the Agency

as conservator or receiver; or

(ii) the date on which the cause of action accrues.

* * *

(j) Other Agency exemptions

* * *

(3) Property protection

No property of the Agency shall be subject to levy,

attachment, garnishment, foreclosure, or sale without the consent of the Agency, nor shall any involuntary lien attach to the property of the Agency.

* * *

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Nev. Rev. Stat. § 116.3116 (2012) provides in

relevant part:

§ 116.3116. Liens against units for assessments

* * *

2. A lien under this section is prior to all other liens

and encumbrances on a unit except:

(a) Liens and encumbrances recorded before the

recordation of the declaration and, in a cooperative,

liens and encumbrances which the association creates, assumes or takes subject to;

(b) A first security interest on the unit recorded

before the date on which the assessment sought to

be enforced became delinquent or, in a cooperative,

the first security interest encumbering only the

unit’s owner’s interest and perfected before the date

on which the assessment sought to be enforced became delinquent; and

(c) Liens for real estate taxes and other governmental assessments or charges against the unit or

cooperative.

The lien is also prior to all security interests described in paragraph (b) to the extent of any charges

incurred by the association on a unit pursuant to NRS

116.310312 and to the extent of the assessments for

common expenses based on the periodic budget

adopted by the association pursuant to NRS 116.3115

which would have become due in the absence of acceleration during the 9 months immediately preceding

institution of an action to enforce the lien, unless federal regulations adopted by the Federal Home Loan

Mortgage Corporation or the Federal National Mortgage Association require a shorter period of priority for

the lien. If federal regulations adopted by the Federal

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Home Loan Mortgage Corporation or the Federal National Mortgage Association require a shorter period

of priority for the lien, the period during which the lien

is prior to all security interests described in paragraph

(b) must be determined in accordance with those federal regulations, except that notwithstanding the provisions of the federal regulations, the period of priority

for the lien must not be less than the 6 months immediately preceding institution of an action to enforce the

lien. This subsection does not affect the priority of mechanics’ or materialmen’s liens, or the priority of liens

for other assessments made by the association.

* * *