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Saticoy Bay LLC Series 350 Durango 104 v. Wells Fargo Home Mortgage (2017)

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Saticoy Bay LLC Series 350 Durango 104 v. Wells Fargo Home Mortgage (2017)

Citation: 133 Nev. 28 (2017); 388 P.3d 970 · Court: Supreme Court of Nevada (en banc), No. 68630 · Decided: January 26, 2017

The Nevada Supreme Court’s en banc answer to the federal due-process attack on hoa-super-priority foreclosure. The court held that NRS 116.3116–.31168 do not implicate due process because neither the HOA’s non-judicial foreclosure nor the Legislature’s enactment of the statutes is “state action,” and that the extinguishment of a subordinate deed of trust through an HOA non-judicial foreclosure does not violate the Takings Clause of the federal or state constitution. The decision directly rejected the state-action analysis of bourne-valley-court-trust-v-wells-fargo-2016. See nevada, sfr-investments-pool-1-v-us-bank.

Facts

Roy and Shirley Senholtz refinanced their Summerlin (Las Vegas) home with a loan from Wells Fargo Home Mortgage, secured by a deed of trust. When they fell behind on their HOA assessments, the HOA (Angel Point Condominiums) conducted a non-judicial foreclosure. Saticoy Bay LLC Series 350 Durango 104 purchased the unit for about $6,900 in back assessments and costs (2013). Saticoy Bay sued to enjoin any Wells Fargo foreclosure and to quiet title free of Wells Fargo’s deed of trust; Wells Fargo argued the statute was unconstitutional because it did not require actual notice and therefore violated due process, and that extinguishment was an unconstitutional taking. The district court ruled for Wells Fargo; Saticoy Bay appealed.

Holding

The Supreme Court reversed, holding:

  1. The statutes do not implicate due process because neither the HOA’s non-judicial foreclosure nor the Legislature’s enactment of NRS Chapter 116 constitutes state action; and
  2. The extinguishment of a subordinate deed of trust through an HOA’s non-judicial foreclosure does not violate the Takings Clauses of the federal and Nevada constitutions.

Reasoning

  • No state action. Constitutional due process and takings protections constrain governmental, not purely private, conduct. The court held that a homeowners’ association conducting a private non-judicial foreclosure under a power of sale is not a state actor, and that the Legislature’s mere enactment of a statute authorizing private foreclosure does not convert the private sale into state action. This squarely rejected the contrary state-action holding of the Ninth Circuit in bourne-valley-court-trust-v-wells-fargo-2016, which had located state action in the statute’s enactment.
  • No taking. Because the lender’s deed of trust was, by operation of the recording/priority statute, subordinate to the HOA’s super-priority lien, its extinguishment by a senior lienholder’s lawful foreclosure is an ordinary consequence of lien priority — not a governmental appropriation of property.

Practical impact

  • For investors / operators: Saticoy Bay removed the state-constitutional and due-process cloud over Nevada HOA-sale titles in state court, reinforcing that a properly conducted super-priority foreclosure can deliver title free of a junior first deed of trust. Title disputes shifted back to tender, notice-compliance, and commercial-reasonableness questions. See lien-survival.
  • For mortgage lenders / servicers: The decision foreclosed the facial due-process and takings theories at the state level; lenders’ viable defenses are largely equitable tender of the super-priority amount and challenges to the particular sale’s compliance and fairness.
  • State/federal interplay: Together with sfr-investments-pool-1-v-bank-of-new-york-mellon-2018, Saticoy Bay set up the abrogation of bourne-valley-court-trust-v-wells-fargo-2016 in federal court.

Good-law status

Still good law. Decided en banc January 26, 2017; the state-action and takings holdings have not been overruled as of last_verified 2026-06-02. The decision is part of the line of Nevada authority that led the Ninth Circuit to recognize that Bourne Valley “is no longer good law” (Bank of America v. Arlington West Twilight HOA, 920 F.3d 620 (9th Cir. 2019)).

Why it matters

Saticoy Bay is the Nevada Supreme Court’s definitive rejection of the constitutional attack on HOA super-priority foreclosure, confirming that the extinguishment of a first deed of trust by a private HOA sale is neither state action nor a taking — a holding that controls Nevada quiet-title outcomes and neutralized the federal Bourne Valley defense.

Applies in →

nevada (binding state precedent). Persuasive in other UCIOA super-priority states confronting state-action/takings challenges.

Legal information, not legal advice. This page summarizes a court decision for educational purposes and does not create an attorney-client relationship. Verify against the primary opinion and consult a licensed attorney in the relevant jurisdiction before acting. Last verified 2026-06-02.

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