DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE FOR MORGAN STANLEY ABS CAPITAL INC TRUST 2006 HE8 MORTGAGE PASS THROUGH CERTIFICATES SERIES 2006 HE8 v. SFR INVESTMENTS POOL LLC (2019)

MEMORANDUM **

SFR Investments Pool 1, LLC (“SFR”) appeals the district court’s grant of summary judgment against it and in favor of Deutsche Bank National Trust Company, as Trustee for Morgan Stanley ABS Capital I Inc. Trust 2006-HE8 Mortgage Pass-Through Certificates, Series 2006-HE8 (“Deutsche Bank”). Reviewing de novo, Berezovsky v. Moniz, 869 F.3d 923, 927 (9th Cir. 2017), we reverse.

The district court granted summary judgment to Deutsche Bank solely on the ground that, under Bourne Valley Court Trust v. Wells Fargo Bank, NA, 832 F.3d 1154 (9th Cir. 2016), the homeowners’ association (“HOA”) “foreclosed under a facially unconstitutional notice scheme.” The Ninth Circuit recently held that Nevada’s HOA foreclosure scheme is not facially unconstitutional, because our decision in Bourne Valley was based on a construction of Nevada law that the Nevada Supreme Court has since made clear was erroneous. See Bank of Am., N.A. v. Arlington W. Twilight Homeowners Ass’n, 920 F.3d 620, 623–24 (9th Cir. 2019) (“Arlington West”) (recognizing that Bourne Valley “no longer controls the analysis” in light of SFR Investments Pool 1, LLC v. Bank of New York Mellon, 134 Nev. 483, 422 P.3d 1248 (2018) (“Star Hill”)).¹

The judgment in favor of Deutsche Bank against SFR is REVERSED. In addition, the district court’s dismissal with prejudice of SFR’s crossclaims is REVERSED. The case is REMANDED for further proceedings consistent with this memorandum disposition. The parties shall bear their own costs on appeal.

FOOTNOTES

1.   Neither Arlington West nor Star Hill is an advisory opinion.