### NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT

In re: ARMIN DIRK VAN DAMME, Debtor. BAP No. NV

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Bk. No. 2:19

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Adv. No. 2:21

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MEMORANDUM * ARMIN DIRK VAN DAMME , Appellant,

v. WELLS FARGO BANK, N.A. , Appellee.
Appeal from the United States Bankruptcy Court for the District of Nevada Mike K. Nakagawa , Bankruptcy Judge, Presiding

Before: GAN, CORBIT , and BRAND , Bankruptcy Judges

. INTRODUCTION Chapter 13 1 debtor Armin Dirk Van Damme (“Debtor”) appeals the bankruptcy court’s order dismissing his adversary complaint against Wells Fargo Bank, N.A. (“Wells Fargo”). Debtor alleged that Wells Fargo lacked

* This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential value, see 9th Cir. BAP Rule 8024-1.

1 Unless specified otherwise, all chapter and section references are to the Bankruptcy Code, 1 1 U.S.C. §§ 101–1532, all “Rule” references are to the Federal Rules of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of Civil Procedure

. 

# FILED

APR 12 2023
SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT2 standing to assert a secured claim, failed to provide adequate documentation to support its claim, and committed fraud by asserting that
Debtor executed a loan modification in 2008. Debtor also claimed t hat the lien was extinguished under Nevada’s “ ancient lien statute,” Nevada Revised Statutes (“NRS ”) 106.240

. T he bankruptcy court dismis sed the complaint with prejudice under Civil Rule 12(b)(6), made applicable by Rule 7012, because Debtor’s claims of fraud and lack of standing were previously dismissed with prejudice by
the United States District Court for the District of Nevada (“District Court”) . The bankruptcy court held that Debtor’s claims were barred by claim preclusion , issue preclusion , and Nevada’s statute s of limitations , and Debtor failed to allege a cognizable theory for recove ry under NRS
106.240 . The court reasoned that even if the loan was accelerated by a notice of default, and even if such acceleration w as sufficient to trigger the ancient lien statute, the loan modification effectively rescinded any acceleration.
Debtor ur ges us to review documents which he believes prove Wells Fargo’s lack of standing and fraud, but like the bankruptcy court, we are bound by the prior decision of the District Court. Our review is limited to whether the bankruptcy court erred by dismissing the claims. It did not,
and we AFFIRM.3 FACTS 2
A. Prepetition events In 2004, Debtor and his wife Geraldine Van Damme refinanced their existing mortgages with a loan of $740,000 from BNC Mortgage, Inc (“BNC”) secured by a deed of trust on their home in Las Vegas, Nevada (the “Property”)

. In October 2007, National Default Servicing Corporation (“NDSC”) , the deed of trust trustee, recorded a notice of default indicating
a p ayment default of $37,401.44. In January 2008, NDSC rescinded the first
notice of default and recorded a second notice of default in dicating a payment default of $53,914.90 (the “Second Notice of Default”)

. BNC subsequently assigned its interest in the de ed of trust to LaSalle Bank, N.A. (“LaSalle”), as trustee under the Trust Agreement for the
Structured Asset Investment Loan Trust Series 2004

- 11 (the “Trust”)

. Bank of America, N.A. became successor by merger with LaSalle, and subsequently assigned its in terest to U.S. Bank, N.A. (“US Bank”). 3 Wells Fargo was the servicer for the Trust , which owned the note.

2 Debtor did not provide excerpts of the record relevant to the order on appeal. We exercise our discretion to take judicial notice of documents electronically filed in Debtor’s bankruptcy case and the related adversary proceeding. See Atwood v. Chase Manhattan Mortg. Co. (In re Atwood) , 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003). Debtor improperly included in his excerpts, and th r ough several additional filings, documents which were not before the bankruptcy court at the time it decided the issue on appeal. We do not consider those documents.

3 Debtor disputes the validity and timing of these assignments, and he contests Wells Fargo’s authority to modify the loan, but as discussed below, the District Court dismissed with prejudice Debtor’s claims involving these arguments.4 In March 2008, Debtor agreed to a loan modification which added the arrears to the principal balance, fixed the previously variable interest rate, adjusted the monthly payment amount, and removed Geraldine Van
Damme as a borrower (the “2008 Loan Modification”)

. Wells Fargo
recorded the 2008 L oan M odification in April 2008

. Debtor failed to make payments under the 2008 L oan M odification , and ND SC recorded a third notice of default in October 2008. NDSC rescinded the third notice of default, and in July 2015, it recorded a fourth
notice of default. After a failed attempt at mediation, Debtor filed suit in
Nevada state court

. After t he defendants removed the case to the District Court , D ebtor filed his third amended complaint in March 2017. He asserted several claims against Wells Fargo, BNC, LaSalle , U.S. Bank, and others based on alleged errors in the assignments and notices of default. He admitted that he signed the 2008 L oan M odification but alleged that Wells Fargo did not have authority to modify the loan because the loan and deed of trust had

n ot yet been assigned to the Trust . Debtor asserted claims for fraud, breach of contract, and to quiet title to the Property. The District Court dismissed Debtor’s complaint, holding that Debtor failed to state cognizable claims for relief. The District C ourt further held
that Debtor’s claims , which were “premised on Defendants’ improper securitization and assignment of instruments, which culminated in an allegedly unauthorized loan modification agreement between Plaintiff and5 Wells Fargo , ” were barred by Nevada’s statute s of limitations. Because leave to amend would be futile, the District Court dismissed the complaint with prejudice. After two further notices of default and a second failed mediation,
NDSC recorded a notice of trustee’s sale set for July 1, 2019.
B. T he bankruptcy and adversary complaint
I n June 2019, Debtor filed his chapter 13 petition. He scheduled his interest in the Property and listed US Bank as a secured creditor with a claim of $808,041. Wells Fargo filed a proof of claim on behalf of US Bank, evidencing a secured claim of $1,492,802.87. In May 2021, Debtor filed an adversary complai nt asserting that Wells Fargo lacked standing to enforce the deed of trust, committed fraud involving the 2008 L oa n M odification, and lacked authority to modify the loan. Debtor filed an amended complaint , add ing a claim to extinguish the
lien under NRS 10 6.240 4 and includ ing a preemptive argument against application of claim preclusion. He alleged that the Second Notice of Default accelerated the debt and NDSC never rescinded it. Thus, under the

4 NRS 106.240 provid es: The lien heretofore or hereafter created of any mortgage or deed of trust upon any real property, appearing of record, and not otherwise satisfied and discharged of record, shall at the expiration of 10 years after the debt secured by the mortgage or d eed of trust according to the terms thereof or any recorded written extension thereof become wholly due, terminate, and it shall be conclusively presumed that the debt has been regularly satisfied and the lien discharged.6 ancient lien statute, the debt was “wholly due” for more tha n ten years and the lien was extinguished. Wells Fargo filed a motion to dismiss the amended complaint and argued that Debtor’s claim for fraud and his claim that Wells Fargo lacked authority to foreclose or to modify the loan were barred by claim preclus ion, issue preclusion, and the statute s of limitations. Wells Fargo further argued that Debtor failed to state a claim for relief under NRS 106.240 because: (1) the ancient lien statute does not apply to accelerated loans, only to loans that become “wholly due” under the terms of a deed of

trus t; (2) the notice of default did not accelerate the loan ; and (3) even if the loan was accelerated, the 2008 L oan M odification effectively rescinded the
Second N otice of D efault. Wells Fargo filed a request for judicial notice of
recorded documents and doc uments filed in the District Court case. In opposition, Debtor argued that his claims were distinct from those
decided by the District Court because i n the adversary complaint he was asserting that Wells Fargo lacked standing to file a proof of claim unde r the holding of Veal v. American Home Mortgage Servicing, Inc. (In re Veal) , 450 B.R. 897 (9th Cir. BAP 2011). He maintained that he alleged a colorable
claim for relief under NRS 106.240 because the S econd N otice of D efault included language which accele rated the debt and NDSC did not file a
recission of that notice.
After a hearing on the motion to dismiss, the court entered a comprehensive written order dismissing Debtor’s amended complaint with7 prejudice. The court hel d that Debtor’s claims that Wells Fargo was not the real party in interest and lacked authority to modify the loan were barred by issue preclusion because the District Court necessarily decided those
issues by dismissing Debtor’s claim to quiet title. The bankruptcy court
determined that Debtor’s fraud claim was barred by claim preclusion and both claims were barred by the statute s of limitations.
The court held that Debtor failed to state a claim for relief under
NRS 106.240 because Wells Fargo recorded the 2008 L oan M odification an d the conduct of the parties, including the subsequent notices of default and recissions, confirmed that the 2008 L oan M odification effectively rescinded
the S econd N otice of D efault. Thus, the debt was not “wholly due” for more than ten years as required by the statute. Debtor timely appealed. JURISDICTION The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and 157(b)(2)( B), (C ) , and (K) . We have jurisdiction under 28 U.S.C. § 158.
ISSUE S Did the bankruptcy court err by granting Wells Fargo’s motion to
dismiss ? Did the bankruptcy court abuse its discretion by dismissing the amended complaint with prejudice?
STANDARD S OF REVIEW We review de novo the bankruptcy court ’ s order granting a motion
to dismiss under Civil Rule 12(b)(6). Movsesia n v. Victoria Versicherung AG ,8 670 F.3d 1067, 1071 (9th Cir. 2012) (en banc)

. Under de novo review, we look at the matter anew, giving no deference to the bankruptcy court ’ s determinations. Francis v. Wallace (In re Francis) , 505 B.R. 914, 917 (9th Cir.
BA P 2014). We review the bankruptcy court ’ s decision to dismiss a complaint with prejudice for abuse of discretion. Willard v. Lockhart

- Johnson (In re
Lockhart

- Johnson) , 631 B.R. 38, 44 (9th Cir. BAP 2021). A bankruptcy court
abuses its discretion if it applies an incorrect legal standard or its factual findings are illogical, implausible, or without support in the record. TrafficSchool.com v. Edriver, Inc. , 653 F.3d 820, 832 (9th Cir. 2011). We may affirm on any basis supported by the record. Bill v. Bre wer , 799 F.3d 1295, 1299 (9th Cir. 2015).
DISCUSSION
Debtor ’s sole argument on appeal is that the bankruptcy court erred by considering facts outside of the record to dismiss the complaint. He
contends that the court should have treat ed the motion as a mot ion for summary judgment and given Debtor an opportunity to submit facts and affidavits which he claims prove Wells Fargo ’s lack of authority and f raud.
A. Legal standards governing motions to dismiss Civil Rule 12(b)(6) provides for dismissal if the plaintiff fails “to state a claim upon which relief can be granted[.]” Fed. R. Civ. P. 12(b)(6). Motions to dismiss under Civil Rule 12(b)(6) can challenge the legal sufficiency of a complaint by testing wh ether it contains cognizable legal9 theories or whether it includes sufficient factual allegations to support
those theories. Johnson v. Riverside Healthcare Sys. , 534 F.3d 1116, 1121 (9th Cir. 2008). To survive a motion to dismiss, “ the non
- conclusory ‘fac tual content’ and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret
Serv. , 572 F.3d 962, 969 (9th Cir. 2009). In reviewing a motion to dismiss, the court generally may n ot consider any materials beyond the pleadings. Lee v. City of Los Angeles , 250 F.3d 668, 688 (9th Cir. 2001), overruled on other grounds by Galbraith v. Cnty

. of Santa Clara , 307 F.3d 1119 (9th Cir. 2002) ; see also Fed. R. Civ. P. 12(d) (“If , on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56.”). But the court may consider documents attached to and referenced in the comp laint. Lee , 250 F.3d at
688. And t he court may consider documents which are properly subject to judicial notice. United States v. Ritchie , 342 F.3d 903, 908 (9th Cir. 2003). When allegations in the complaint contradict matters that are properly subject to judicial notice, the court need not accept those allegations as true when considering a motion to dismiss. Lazy Y Ranch Ltd. v. Behrens , 546 F.3d 580, 588 (9th Cir. 2008). Here, the bankruptcy court properly considered the documents
attached to the amended complaint and those included in Wells Fargo’s request for judicial notice; it was not required to treat the motion to dismiss10 as a motion for summary judgment. Debtor offers no other argument why the bankruptcy court erred in dismissing his complaint and we find no error in the bankruptcy court’s decision.
B. The bankruptcy court did not err by granting the motion to dismiss. The bankruptcy court properly dismissed Debtor’s claims that Wells Fargo was not a real party in interest , lacked authority to modify or enforce
the loan , and committed fraud, under claim preclusion, issue preclusion,
and the statute s of limitations.
Claim preclusion prohibits relitigation of “any claims that were raised or could have been raised” in a prior action between the same parties or their privies. Owens v. Kaiser Found. Health Plan, Inc. , 244 F.3d 708, 713 (9th Cir. 2001) (citation omitted)

. The preclusive effect of the District Court’s decision is governed by federal law, Taylor v. Sturgell , 553 U.S . 880, 891 (2008), which requires: “ (1) an identity of claims; (2) a final judgment on the merits; and (3) the same parties or privity between parties ,” Owens , 244 F.3d at 713. To determine whether claims are identical, we consider
four criteria: (1) whether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise out of the same transactional nucleus of facts.11 Harris v. C n ty. of Orange , 682 F.3d 1 1 26, 1132 (9th Cir. 2012). Whether
the suits arise out of the same transactional nucleus of facts is the most important criterion. Id. Here, all of Debtor’s claims

— except for his claim under
NRS 106.240

— arise from the same transactional nucleus of facts at issue in the District Court action: the allegedly improper or untimely assignments which deprived Wells Fargo of authority to enforce the deed of trust or modify the loan, and Wells Fargo ’s alleged fraud in executing the 2008
L oan M odification. The Distri ct Court’s dismissal with prejudice is a final judgment on the merits, Leon v. IDX Systems Corp. , 464 F.3d 951, 962 (9th Cir. 2006) , and Debtor and Wells Fargo were both parties in that litigation. Thus, all of Debtor’s claims other than his lien extinguis hment claim are barred by claim preclusion. 5 Additionally, Debtor offers no argument , nor do we perceive any , why his claims involving Wells Fargo’s authority to enforce the note and

5 Th ough w e affirm the bankruptcy court’s dismissal of Debtor’s claims against Wells Fargo under claim preclusion, we find no error in the court’s application of issue preclusion to dismiss some of those claims. Issue preclusion under federal law requires: (1) there was a full and fair opp ortunity to litigate the issue in the prior action; (2) the issue was actually litigated; (3) the issue was lost as a result of a final judgment in the prior action; and (4) the party against whom issue preclusion is asserted was a party or in privity with a party in the prior action. I.R.S. v. Palmer (In re Palmer) , 207 F.3d 566, 568 (9th Cir. 2000). The validity of the assignments and Wells Fargo’s authority to enforce the note and deed of trust were actually litigated in the District Court action as part of Debtor’s claim to quiet title. Debtor was the plaintiff in that action, had a full and fair opportunity to litigate the issues, and lost those issues by virtue of the District Court’s dismissal with prejudice.12 deed of trust , or his claim of fraud , are not barred by Nevada’s statutes of
limitations. 6 T he District Court alternatively relied on the statute s of limitations to dismiss Debtor’s prior action. The claims were time

- barred
when Debtor filed the District Court action in 2015, and they remain ed
time

- barred when he filed his adversary complaint in 2021

. Finally, t he bankruptcy court properly dismissed Debtor’s remaining
claim

— to extinguish the lien under NRS 106.240

— because Debtor did not state a cognizable claim for relief. Debtor alleged only that the Second
N otice of Default a ccelerated the loan and NDSC never rescinded the
default notice

. His allegations are insufficient to state a claim under the

statute because they are belied by the documents attached to his complaint and judicially noticed by the bankrupt cy court. The Nevada Supreme Court has not definitively held that a loan acceleration is sufficient to trigger NRS 106.240, but we need not resolve the question because the 2008 L oan M odification unequivocally decelerated any acceleration under the Second Notice of Default.
T he 2008 L oan M odification restated the unpaid principal balance as $796,930.46 , fixed the interest rate , and provided for payment of the

6 NRS 11.190(1)(b) provides that : “An action upon a contract, obligation or liability founded upon an instrument in writing

. . .” must be commenced within six years. NRS 106.330 defines “instrument” as “a mortgage, deed of trust or other instrument encumbering real party as security for the repayment of a debt.” As noted by the bankruptcy court, the 2008 L oan M odification meets this definition. NRS 11.190(3)(d) provides that fraud actions must be filed within three years of discovery.13 balance through monthly payments of principal and interest beginning in
March 2008. I t further provided that , if Debtor still owed amounts under
the note and deed of trust as amended , those amounts would be due on October 1, 2034. Thus, even though Debtor disputes the val idity of the 2008 Loan Modification, it is clear evidence that Wells Fargo no longer held the
amounts under the loan and deed of trust as “wholly due.” The subsequent
default notices and recissions further evidence that the Second Notice of
Default was res cinded by the 2008 Loan Modification. The bankruptcy court properly considered the recorded and judicially noticed documents in determining that Debtor failed to state a cognizable claim for relief under NRS 106.240, and we discern no error.
C. Di smiss al of the amended complaint with prejudice was warranted. Pursuant to Civil Rule 15, made applicable by Rule 7015, leave to amend a complaint should be freely given when justice so requires. The Ninth Circuit has repeatedly held that a court “should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation
of other facts.” Lopez v. Smith , 203 F.3d 1122, 1127 (9th Cir. 2000) ( citations
omitted ).
Because the bankruptcy court correctly determined that Debtor’s claims were barred by claim preclusion, issue preclusion, and the statute s of limitations

— and his claim under NRS 106.240 fails as a matter of law14 based on the judicially noticed documents

— amendment w ould be futile. See, e.g. , Censo, LLC v. NewRez, LLC (In re Censo, LLC) , 638 B.R. 416, 426 (9th Cir. BAP 2022) (affirming dismissal with prejudice where relief was barred by claim preclusion). Accordingly, the court properly dismissed the amended complaint with prejudice.
CONCLUSION Based on the foregoing, we AFFIRM the bankruptcy court’s order dismissing Debtor’s amended complaint with prejudice.