NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re:

ARMIN DIRK VAN DAMME,

 Debtor.

BAP No. NV-22-1175-GCB

Bk. No. 2:19-bk-14142-MKN 

Adv. No. 2:21-ap-01067-MKN

 

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 131 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, 11 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 CIRCUIT
2

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 that the 

lien was extinguished under Nevada’s “ancient lien statute,” Nevada

Revised Statutes (“NRS”) 106.240.

The bankruptcy court dismissed 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 statutes of limitations,

and Debtor failed to allege a cognizable theory for recovery under NRS 

106.240. The court reasoned that even if the loan was accelerated by a 

notice of default, and even if such acceleration was sufficient to trigger the 

ancient lien statute, the loan modification effectively rescinded any 

acceleration.

Debtor urges 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

FACTS2

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 payment default of $37,401.44. In January 2008, NDSC rescinded the first 

notice of default and recorded a second notice of default indicating a 

payment default of $53,914.90 (the “Second Notice of Default”).

BNC subsequently assigned its interest in the deed 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 interest 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 through 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 Loan Modification in April 2008.

Debtor failed to make payments under the 2008 Loan Modification,

and NDSC 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 the defendants removed the case to the District Court, Debtor 

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 Loan Modification but alleged that Wells Fargo did not 

have authority to modify the loan because the loan and deed of trust had 

not 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 Court 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 and 
5

Wells Fargo,” were barred by Nevada’s statutes 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. The bankruptcy and adversary complaint

In 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 complaint asserting that 

Wells Fargo lacked standing to enforce the deed of trust, committed fraud 

involving the 2008 Loan Modification, and lacked authority to modify the 

loan. Debtor filed an amended complaint, adding a claim to extinguish the 

lien under NRS 106.2404 and including 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 provides:

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 deed 

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 than 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 

preclusion, issue preclusion, and the statutes 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 

trust; (2) the notice of default did not accelerate the loan; and (3) even if the 

loan was accelerated, the 2008 Loan Modification effectively rescinded the

Second Notice of Default. Wells Fargo filed a request for judicial notice of 

recorded documents and documents filed in the District Court case.

In opposition, Debtor argued that his claims were distinct from those 

decided by the District Court because in the adversary complaint he was 

asserting that Wells Fargo lacked standing to file a proof of claim under 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 Second Notice of Default 

included language which accelerated 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 with 
7

prejudice. The court held 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 statutes of limitations.

The court held that Debtor failed to state a claim for relief under 

NRS 106.240 because Wells Fargo recorded the 2008 Loan Modification and 

the conduct of the parties, including the subsequent notices of default and 

recissions, confirmed that the 2008 Loan Modification effectively rescinded 

the Second Notice of Default. 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.

ISSUES

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?

STANDARDS OF REVIEW

We review de novo the bankruptcy court’s order granting a motion 

to dismiss under Civil Rule 12(b)(6). Movsesian 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. 

BAP 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. Brewer, 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 treated the motion as a motion for 

summary judgment and given Debtor an opportunity to submit facts and 

affidavits which he claims prove Wells Fargo’s lack of authority and fraud.

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 whether it contains cognizable legal 
9

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 ‘factual 

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 not 

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 complaint. Lee, 250 F.3d at 

688. And the 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 dismiss 
10

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 statutes 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. Cnty. of Orange, 682 F.3d 1126, 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 

Loan Modification. The District 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 extinguishment 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 Though we 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 opportunity 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 The District Court alternatively relied on the statutes of 

limitations to dismiss Debtor’s prior action. The claims were time-barred 

when Debtor filed the District Court action in 2015, and they remained

time-barred when he filed his adversary complaint in 2021.

Finally, the 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 

Notice of Default accelerated 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 bankruptcy 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 Loan Modification unequivocally decelerated 

any acceleration under the Second Notice of Default.

The 2008 Loan Modification 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 Loan Modification 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. It 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 validity 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 rescinded 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. Dismissal 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 statutes 

of limitations—and his claim under NRS 106.240 fails as a matter of law 
14

based on the judicially noticed documents—amendment would 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.