SFR Investments Pool 1, LLC v. Bank of New York Mellon (2018)
Citation: 134 Nev. 483 (2018); 422 P.3d 1248 · Court: Supreme Court of Nevada (en banc), No. 72931 · Decided: 2018
The Nevada Supreme Court decision that directly repudiated the statutory reading underlying bourne-valley-court-trust-v-wells-fargo-2016. The court held that NRS 116.3116 does not create a mere “opt-in” notice scheme; rather, it incorporates the mandatory notice provisions of NRS 107.090, which require an HOA to provide notice of default and notice of sale to the holders of subordinate security interests regardless of whether they requested it. Because the statute already mandates lender notice, the federal due-process premise of Bourne Valley was wrong. See nevada, hoa-super-priority, sfr-investments-pool-1-v-us-bank.
Facts
The dispute followed the recurring Nevada pattern: a homeowner in a common-interest community defaulted on HOA assessments while a first deed of trust (held by or for Bank of New York Mellon) encumbered the unit. The HOA conducted a non-judicial foreclosure, and SFR Investments Pool 1, LLC purchased the property, then litigated whether the super-priority foreclosure extinguished the bank’s deed of trust. The bank raised the federal Bourne Valley due-process argument that the statute’s notice scheme was unconstitutionally “opt-in.”
Holding
The court held that NRS 116.3116 incorporates the mandatory notice provisions of NRS 107.090, so the statute requires notice of default and notice of sale to subordinate lienholders — it is not the “opt-in” scheme the Ninth Circuit described in Bourne Valley. The court thereby rejected Bourne Valley’s interpretation of the Nevada statutory scheme.
Reasoning
- Statutory incorporation of NRS 107.090. The court read Chapter 116 together with NRS 107.090 (the deed-of-trust foreclosure-notice statute), which entitles a “person with an interest” — including a junior security-holder — to mandatory notice of default and of sale. Properly construed, the HOA-foreclosure statute therefore already required actual notice to lenders.
- Federal courts do not have the last word on state law. As the authoritative expositor of Nevada statutes, the Nevada Supreme Court’s construction controls over the Ninth Circuit’s contrary reading. Because the predicate of the Bourne Valley due-process holding (an “opt-in”-only scheme) does not exist, that holding cannot stand.
Practical impact
- For investors / operators: This decision closed the principal federal due-process escape hatch for lenders contesting Nevada HOA-sale titles, confirming that lenders received (or were entitled to) mandatory statutory notice. Quiet-title analysis turns on whether the required notices were actually given and on tender, not on facial unconstitutionality. See lien-survival.
- For mortgage lenders / servicers: The viable defenses narrowed to equitable tender of the super-priority amount and sale-specific challenges (defective notice, commercial unreasonableness), not a categorical due-process bar.
- Federal recognition. Relying on this decision, the Ninth Circuit acknowledged that Bourne Valley “is no longer good law” in Bank of America, N.A. v. Arlington West Twilight Homeowners Ass’n, 920 F.3d 620, 623–24 (9th Cir. 2019).
Good-law status
Still good law. Decided en banc in 2018; not overruled as of last_verified
2026-06-02. It is the controlling Nevada authority on the statutory-notice question
and the proximate cause of the federal abrogation of
bourne-valley-court-trust-v-wells-fargo-2016.
Why it matters
This is the case that buried Bourne Valley. For any operator holding or underwriting a Nevada HOA-foreclosure title, it establishes that the statute mandates lender notice — shifting every contest from “is the statute constitutional?” to “was proper notice given and was tender made?”
Related authorities
- sfr-investments-pool-1-v-us-bank — foundational super-priority holding (2014).
- bourne-valley-court-trust-v-wells-fargo-2016 — the federal due-process holding this decision repudiated.
- saticoy-bay-v-wells-fargo-2017 — companion ruling rejecting state action and takings challenges.
- hoa-super-priority · lien-survival — concept pages.
Applies in →
nevada (binding state precedent); recognized by the Ninth Circuit as displacing Bourne Valley in federal HOA-foreclosure litigation.
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.