Court Opinion

ID: 6246395
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:00:35.937748+00
Date Added: 2024-06-11T08:59:18.267658
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        FEB 17 2022
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

U.S. BANK, N.A., as Trustee for the             No.    17-16399
Specialty Underwriting and Residential
Finance Trust Mortgage Loan Asset-Backed        D.C. No.
Certificates Series 2006-BC4,                   3:16-cv-00501-RCJ-WGC

                Plaintiff-Appellant,
                                                MEMORANDUM*
 v.

THUNDER PROPERTIES, INC.,

                Defendant-Appellee,

and

WESTLAND REAL ESTATE
DEVELOPMENT AND INVESTMENTS,

                Defendant.

                   Appeal from the United States District Court
                            for the District of Nevada
                   Robert Clive Jones, District Judge, Presiding

                    Argued and submitted September 13, 2019
                     Submission withdrawn October 2, 2019
                        Re-submitted February 15, 2022
                            San Francisco, California

Before: GOULD, BEA, and FRIEDLAND, Circuit Judges.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      Appellant U.S. Bank appeals from the district court’s order dismissing its

claim against Appellee Thunder Properties, Inc. (“Thunder”) for a declaratory

judgment that U.S. Bank’s first deed of trust on a residential property owned by

Thunder remains a present interest in the property. We have jurisdiction under 28

U.S.C. § 1291. We vacate the district court’s order dismissing U.S. Bank’s action

and remand for further proceedings.

      Appellant U.S. Bank held a first deed of trust on a residential property in

Cold Springs, Nevada. After the property owners fell behind on their homeowners

association (“HOA”) assessments, the HOA proceeded with a foreclosure sale,

recording its election to sell the property in April 2010, selling the property in

February 2011, and recording the sale on the same day it occurred. The buyer later

sold the property to Westland Real Estate Development and Investments, which

transferred its interest in the property to Appellee Thunder Properties, Inc.

(“Thunder”).

      In August 2016, U.S. Bank sued Thunder in the United States District Court

for the District of Nevada. U.S. Bank sought a declaration to quiet title, arguing

that its deed of trust was not extinguished by the foreclosure sale and remains a

present interest in the property. The district court granted Thunder’s motion to

dismiss U.S. Bank’s claim for declaratory relief. The district court applied the

five-year statute of limitations set forth in Nevada Revised Statutes §§ 11.070 and

                                           2
11.080 for certain quiet title actions, reasoning that U.S. Bank’s claim accrued and

the five-year limitations period started to run on February 10, 2011, when the

foreclosure sale took place and was recorded. The district court thus held that the

claim was time-barred by the time U.S. Bank filed its Complaint in August 2016,

approximately five and a half years later. U.S. Bank appealed the dismissal of its

claim to this court.

      We vacated submission, stayed further proceedings, and certified the

following questions to the Nevada Supreme Court:

             (1) When a lienholder whose lien arises from a mortgage for the
             purchase of a property brings a claim seeking a declaratory judgment
             that the lien was not extinguished by a subsequent foreclosure sale of
             the property, is that claim exempt from statute of limitations under
             City of Fernley v. Nevada Department of Taxation, 366 P.3d 699
             (Nev. 2016)?

             (2) If the claim described in (1) is subject to a statute of limitations:
                     (a) Which limitations period applies?
                     (b) What causes the limitations period to begin to run?

U.S. Bank, N.A. v. Thunder Props., Inc., 958 F.3d 794, 796 (9th Cir. 2020).

      The Nevada Supreme Court accepted these certified questions and, on

February 3, 2022, issued an opinion answering them. U.S. Bank, N.A. v. Thunder

Props., Inc., No. 81129, 2022 WL 332614 (Nev. Feb. 3, 2022). The court held that

declaratory relief actions are not categorically exempt from statutes of limitations

under Nevada law, id. at *1-2, and that Nevada’s four-year catch-all statute of

limitations, Nev. Rev. Stat. § 11.220, applies to actions like this one to determine

                                           3
the validity of a lien, id. at *3. The court further held that the statute of limitations

does not begin to run until the titleholder affirmatively repudiates the lien or takes

some action that is otherwise inconsistent with the lien’s continued existence, id. at

*5—and the court specified that a foreclosure sale does not necessarily meet these

criteria for starting the limitations period, id. at *5-6.

       On the record before us, we cannot determine whether such an action

triggering the running of the limitations period has occurred and, consequently, we

cannot determine whether U.S. Bank’s action is time-barred by the four-year

limitations period. Accordingly, we vacate the district court’s order dismissing

U.S. Bank’s action and remand for further proceedings consistent with the Nevada

Supreme Court’s opinion answering our certified questions.

       VACATED and REMANDED.

                                             4