Court Opinion

ID: 9882263
Source: CourtListenerOpinion
Date Created: 2023-10-05 17:00:53.685041+00
Date Added: 2024-06-11T15:00:58.613212
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        OCT 5 2023
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

7321 WANDERING STREET TRUST,                    No.    22-15526

                Plaintiff-Appellant,            D.C. No.
                                                2:21-cv-01193-JAD-EJY
 v.

NEW RESIDENTIAL MORTGAGE LOAN                   MEMORANDUM*
TRUST 2020-NPL2,

                Defendant-Appellee,

and

FIRST AMERICAN TRUSTEE
SERVICING SOLUTIONS, LLC; NEVADA
LEGAL NEWS,

                Defendants.

                   Appeal from the United States District Court
                             for the District of Nevada
                   Jennifer A. Dorsey, District Judge, Presiding

                            Submitted October 2, 2023**
                               Las Vegas, Nevada

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: RAWLINSON and OWENS, Circuit Judges, and FITZWATER,***
District Judge.

      The 7321 Wandering Street Trust (WST) filed suit to establish that the lien

encumbering its property was extinguished under Nevada’s ancient lien statute.

Nev. Rev. Stat. (NRS) § 106.240. WST also recorded a lis pendens to prevent

foreclosure by New Residential Mortgage Trust (NewRez) during the litigation.

The district court dismissed WST’s claim, holding that the loan had not become

wholly due under NRS § 106.240, but did not address NewRez’s request to cancel

the lis pendens. We have jurisdiction under 28 U.S.C. § 1291, and we affirm in

part and remand in part.

      We review a dismissal for failure to state a claim de novo. L.A. Lakers, Inc.

v. Fed. Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017). We also review interpretations

of state law de novo, following the decisions of the state’s highest court. Ariz.

Elec. Power Coop., Inc. v. Berkeley, 59 F.3d 988, 991 (9th Cir. 1995). In the

absence of such a decision, we must predict how the highest state court would

decide the issue. See id.

      1.     Under NRS § 106.240, a lien under a deed of trust is “conclusively

presumed . . . discharged” ten years after the debt becomes “wholly due.” WST

argues that ten years have elapsed since the debt secured by the deed of trust

      ***
            The Honorable Sidney A. Fitzwater, United States District Judge for
the Northern District of Texas, sitting by designation.

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became wholly due either in (1) December 2010 when the deed trustee filed the

Notice of Default and Election to Sell or (2) June 2011 when the debt was

discharged in bankruptcy.

         Even if the 2010 Notice of Default triggered the ten-year period by making

the debt wholly due, the deed trustee’s March 2011 Notice of Rescission undid any

acceleration of the debt by withdrawing the Notice of Default and Election to Sell.

See SFR Invs. Pool 1, LLC v. U.S. Bank N.A., 507 P.3d 194, 198 (Nev. 2022)

(rejecting an argument that a loan remains wholly due after the rescission of a

notice of default that accelerated the loan).

         The 2011 bankruptcy discharge also did not trigger the ten-year period. In a

factually analogous case decided during the pendency of this appeal, the Nevada

Supreme Court held that bankruptcy discharge does not make a debt wholly due

under NRS § 106.240. W. Coast Servicing, Inc. v. Kassler, No. 84122, 2023 WL

4057073, at *2 (Nev. June 16, 2023) (unpublished).1 The district court therefore

properly dismissed WST’s claim because neither the rescinded default notice nor

the bankruptcy discharge made the debt wholly due.2

1
    Though this decision is unpublished, we rely on it as persuasive authority.
2
  WST forfeited its argument that the filing of the bankruptcy petition triggered the
ten-year period by omitting it from its amended complaint and opening brief. See
Orr v. Plumb, 884 F.3d 923, 932 (9th Cir. 2018) (“[A]rguments raised for the first
time on appeal or omitted from the opening brief are deemed forfeited.”).

                                            3
      2.     NewRez is entitled to cancellation of the lis pendens recorded against

the property because WST is not “likely to prevail,” nor does it have “a fair chance

of success on the merits in the action” having failed to state a claim as a matter of

law. NRS § 14.015(3). We therefore remand to the district court with instructions

to grant the requested cancellation of the lis pendens.

      AFFIRMED in part; REMANDED in part.

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