Court Opinion

ID: 1033214
Source: CourtListenerOpinion
Date Created: 2013-07-09 19:53:06.495829+00
Date Added: 2024-06-11T12:44:19.211439
License: Public Domain

129 Nev., Advance Opinion 341
                           IN THE SUPREME COURT OF THE STATE OF NEVADA

                    GEORGE P. CHAPMAN, JR.; AND                            No. 58664
                    BRENDA J. GULLY CHAPMAN,
                    Appellants,
                    vs.
                    DEUTSCHE BANK NATIONAL TRUST
                    COMPANY, AS TRUSTEE, A GERMAN
                    NATIONAL CORPORATION;                                   FILED
                    NATIONAL DEFAULT SERVICING
                                                                             mAY 3 %1 2013
                    CORPORATION, AN ARIZONA
                    CORPORATION; AND HOMEQ
                    SERVICING CORPORATION, A
                    CALIFORNIA CORPORATION,
                    Respondents.

                                Certified questions under NRAP 5 concerning whether Nevada
                    law characterizes quiet title actions and unlawful detainer actions as
                    proceedings in personam, in rem, or quasi in rem. United States Court of
                    Appeals for the Ninth Circuit; Ronald M. Gould and Milan D. Smith, Jr.,
                    Circuit Judges, and Amy J. St. Eve, United States District Judge.
                                Questions answered.

                    Terry J. Thomas, Reno; Geoffrey L. Giles, Reno,
                    for Appellants.

                    Houser & Allison, APC, and Jeffrey S. Allison, Irvine, California,
                    for Respondents.

                    BEFORE THE COURT EN BANC.

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                                                  OPINION
                By the Court, PICKERING, C.J.:
                             The United States Court of Appeals for the Ninth Circuit has
                certified the following questions to this court:
                                   1. Is a quiet title action under Nevada
                             Revised Statutes § 40.010, which is premised on
                             an allegedly invalid trustee's sale under Nevada
                             Revised Statutes § 107.080(5)(a), properly
                             characterized under Nevada law as a proceeding
                             in personam, in rem, or quasi in rem?
                                   2. Is an unlawful detainer action under
                             Nevada Revised Statutes § 40.255(1)(c) properly
                             characterized under Nevada law as a proceeding
                             in personam, in rem, or quasi in rem?
                Chapman v. Deutsche Bank Nat'l Trust Co., 651 F.3d 1039, 1048 (9th Cir.
                2011).
                                                       I.
                             This dispute arises out of a nonjudicial foreclosure proceeding
                that respondent Deutsche Bank National Trust Company initiated against
                a home owned by appellants George P. Chapman, Jr., and Brenda J. Gully
                Chapman. Deutsche Bank purchased the home by credit bid at the
                trustee's sale. When the Chapmans did not vacate, Deutsche Bank filed
                an unlawful detainer action in Reno justice court, seeking to have them
                removed. The Chapmans countered by filing a complaint in Nevada
                district court seeking to quiet title to the property. They alleged that
                Deutsche Bank did not own the promissory note or deed of trust and had
                foreclosed without proper notice under NRS 107.080, invalidating the
                trustee's sale.
                             The Chapmans moved the justice court to transfer the
                unlawful detainer proceeding to district court so it could be consolidated
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                with the quiet title action. But before the justice court could decide the
                Chapmans' motion, Deutsche Bank removed the quiet title action from
                state to federal district court and filed a motion to dismiss the complaint
                for failure to state a claim upon which relief could be granted under Fed.
                R. Civ. P. 12(b)(6). A few days later, the Chapmans moved to remand the
                quiet title action back to state court on the basis that the unlawful
                detainer action gave the state court exclusive jurisdiction over the real
                property at issue in both suits. The federal court denied the Chapmans'
                motion to remand and granted Deutsche Bank's motion to dismiss.
                             The Chapmans appealed to the Ninth Circuit Court of
                Appeals. They argued that the federal district court should not have ruled
                on the motion to dismiss because the prior-exclusive-jurisdiction doctrine
                required the federal court to abstain in favor of the earlier-filed unlawful
                detainer action. The Ninth Circuit agreed with the Chapmans that, "if
                both the Quiet Title Action and the Unlawful Detainer Action are
                characterized as in rem or quasi in rem, then the prior exclusive
                jurisdiction doctrine requires us to vacate the District Court's dismissal of
                the Quiet Title Action." Chapman, 651 F.3d at 1048.
                             Existing Nevada law does not specify whether quiet title and
                unlawful detainer actions are in personam, in rem, or quasi in rem, so the
                Ninth Circuit certified questions concerning their proper characterization
                to this court.

                             The prior-exclusive-jurisdiction doctrine holds that, "when one
                court is exercising in rem jurisdiction over a res, a second court will not
                assume in rem jurisdiction over the same res." Marshall v. Marshall, 547
                U.S. 293, 311 (2006). If Deutsche Bank's unlawful detainer action and the
                Chapman's quiet title action are "strictly in personam," no prior-exclusive-
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jurisdiction problem arises because "both a state court and a federal court
having concurrent [in personam] jurisdiction may proceed with the
litigation." Penn Gen. Gas. Co. v. Pennsylvania ex rel. Schnader, 294 U.S.
189, 195 (1935). Similarly, if only one of the causes of action is in rem or
quasi in rem, "both cases may proceed side by side."         United States v.
$79,123.49 in U.S. Cash & Currency, 830 F.2d 94, 97 (7th Cir. 1987). "But
if the two suits are in rem or quasi in rem, requiring that the court or its
officer have possession or control of the property which is the subject of the
suit in order to proceed with the cause and to grant the relief sought, the
jurisdiction of one court must of necessity yield to that of the other." Penn
Gen. Gas. Co., 294 U.S. at 195.
            The character of the parties' competing quiet title and
unlawful detainer actions thus is determinative of the Chaprnans' federal
appeal. Of note, we do not need to decide whether quiet title and unlawful
detainer actions are in personam or in rem or quasi in rem. The prior
exclusive jurisdiction doctrine applies whether the actions are in rem or
quasi in rem, just not if they are in personam.       See Seitz v. Fed. Nat'l
Mortg. Ass'n, No. 3:12CV633, 2012 WL 5523078, at *2, 8 (E.D. Va. Nov.
14, 2012) (declining to determine whether quiet title actions are in rem or
quasi in rem because the distinction does not impact the prior exclusive
jurisdiction rule in a case "strikingly similar" to Chapman).
            Since current Nevada law does not resolve the questions
certified to us by the Ninth Circuit, we exercise our discretion under
NRAP 5 and accept them. See Volvo Cars of N. Am. v. Ricci,      122 Nev. 746,
749-51, 137 P.3d 1161, 1163-64 (2006). We reframe the questions,
however, to ask whether the quiet title and unlawful detainer actions are
in personam, on the one hand, or quasi in rem or in rem, on the other

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                 hand. This obviates the need to debate the exiguous distinction between
                 in rem and quasi in rem jurisdiction, which was historically significant but
                 now is of questionable importance. Restatement (Second) of Judgments §
                 6 cmt. a (1982); see Terracon Consultants W., Inc. v. Mandalay Resort
                 Grp., 125 Nev. 66, 72, 206 P.3d 81, 85 (2009) (this court may exercise its
                 discretion to reframe certified questions).

                             "[A] proceeding in rem is one taken directly against property,
                 and has for its object the disposition of the property, without reference to
                 the title of individual claimants. . . ." Pennoyer v. Neff, 95 U.S. 714, 734
                 (1877), overturned in part on other grounds by Shaffer v. Heitner, 433 U.S.
                 186, 205-06 (1977). In other words, when an action is in rem, the resulting
                 judgment applies against the whole world. Restatement (Second) of
                 Judgments §§ 6, 30 (1982). By comparison, an in personam judgment acts
                 upon the persons who are parties to the suit. Shaffer, 433 U.S. at 199; see
                 also State v. Cent. Pac. R.R. Co., 10 Nev. 47, 80 (1875) (explaining that
                 actions in personarn seek personal judgments and are directed against
                 specific persons), overruled on other grounds by State ex rel. State Bd. of
                 Equalization v. Barta, 124 Nev. 612, 626, 188 P.3d 1092, 1101-02 (2008);
                 Restatement (Second) of Judgments § 5 (1982). Quasi in rem proceedings
                 are "a halfway house between in rem and in personam jurisdiction,"
                 because the "action is not really against the property" but rather is used
                 "to determine rights in certain property." 4A Charles Alan Wright &
                 Arthur R. Miller, Federal Practice and Procedure § 1070 (3d ed. 2002).
                                                       A.
                             A Nevada quiet title action is predominantly in rem or quasi
                 in rem. NRS 40.010 governs Nevada quiet title actions and provides: "An
                 action may be brought by any person against another who claims an estate
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or interest in real property, adverse to the person bringing the action, for
the purpose of determining such adverse claim." A plea to quiet title does
not require any particular elements, but "each party must plead and prove
his or her own claim to the property in question" and a "plaintiff's right to
relief therefore depends on superiority of title."   Yokeno v. Mafnas, 973
F.2d 803, 808 (9th Cir. 1992); see also Hodges Transp., Inc. v. Nevada, 562
F. Supp. 521, 522 (D. Nev. 1983).
            In Robinson v. Kind, this court held that a proceeding is
substantially in rem where its "direct object is to reach and dispose of the
property of the parties described in the complaint." 23 Nev. 330, 343, 47
P. 977, 978-79 (1897). After rejecting the argument that an action to quiet
title necessarily invokes in personam jurisdiction because it seeks an
equitable remedy and equity normally acts upon the person, this court
explained that these precepts do not apply when the state has provided by
statute for the adjudication of titles to real estate within its boundaries,
which it deemed to be an in rem proceeding. Id. at 340-42, 47 P. at 978.
Although we decided Robinson more than 100 years ago, its holding that
quiet title affects property and thus is in rem (or quasi in rem) remains
good law. See Cent. Pac. R.R. Co., 10 Nev. at 80 ("A judgment in rem is
founded on a proceeding not as against the person as such, but against the
thing or subject-matter itself whose state or condition is to be determined."
(internal quotations omitted)).
            By their complaint, the Chapmans seek to revest title in
themselves based on Deutsche Bank's alleged violation of NRS 107.080.
Even though a judgment quieting title vests title in a particular claimant,
and to that extent affects the interests of persons,        see Restatement
(Second) of Judgments § 6 cmt. a (1982), its essential purpose is to

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                establish superiority of title in property.     Arndt v. Griggs, 134 U.S. 316,
                321 (1890). This is quintessentially a manifestation of an in rem or quasi
                in rem proceeding.    See Seitz, 2012 WL 5523078, at *11 (holding that a
                suit to quiet title is either in rem or quasi in rem); 1st Nat'l Credit Corp. v.
                Von Hake, 511 F. Supp. 634, 641-42 (D. Utah 1981) (commenting on the
                semantic differences between in rem and quasi-in-rem labels and holding
                that the Utah statutory action to quiet title is an action in rem, or quasi in
                rem); see also 40235 Washington St. Corp. v. Lusardi, 976 F.2d 587, 589
                (9th Cir. 1992) ("A quiet title action is a proceeding in rem."), Neagle v.
                Brooks, 373 F.2d 40, 43 (10th Cir. 1967) (quiet title is "purely an in rem
                action"); Restatement (Second) of Judgments § 30 ctht. a (1982) (actions
                "to quiet or remove a cloud on title" are quasi in rem because the
                judgments they produce determine interests in property); Restatement
                (Second) of Conflict of Laws § 95 cmt. f (Supp. 1989) (deeming quiet title
                actions quasi in rem because judgments rendered in them affect the
                interests of particular persons in property).
                            Deutsche Bank nonetheless insists that the Chapmans' action
                is in personam because it does not seek to quiet title so much as to
                establish breach of contract and incorporated foreclosure statutes. As
                support, Deutsche Bank points to the Chapmans' allegations of loan-
                servicing irregularities and improper foreclosure notices and their prayer
                for compensatory damages. We disagree. The Chapmans' claim is in rem
                or quasi in rem because they seek to establish title to property. The
                nature of their claim does not change because they request monetary
                damages in addition to the central relief—quiet title—that they request.
                Here, as in Seitz, the Chapmans' quiet title claim "is quasi in rem or in
                rem, [and] it does not lose that nature simply because [they] seek[ ]

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                monetary damages in addition to title to property."          Seitz, 2012 WL
                5523078, at *11.
                                                      B.
                            The primary purpose of an unlawful detainer action is to
                restore the possession of property to one from whom it has been forcibly
                taken or to give possession to one from whom it is unlawfully being
                withheld. G. C. Wallace, Inc. v. Eighth Judicial Dist. Court, 127 Nev. ,
                     262 P.3d 1135, 1140 (2011); Seitz, 2012 WL 5523078, at *4 (citing
                Shorter v. Shelton, 33 S.E.2d 643, 647 (Va. 1945)). Consistent with this
                purpose, a person who obtains title to property at a trustee's sale may
                remove holdover tenants by means of an unlawful detainer action under
                NRS 40.255(1)(c).
                            To initiate an action under NRS 40.255, the would-be plaintiff
                must serve the property's occupants with a notice to quit. If the occupants
                do not vacate the property within the time set by the notice, the owner
                may file a written complaint for unlawful detainer, seeking restitution of
                the premises. NRS 40.300. The plaintiff must serve the complaint with
                summons on the occupants, id., and provide the court with proof of service
                of the notice to quit as required by NRS 40.280(3) or (4).
                            Thereafter, a trial may ensue if the parties' pleadings
                demonstrate an issue of fact. NRS 40.310. But the proceedings are
                summary and their scope limited. See G.C. Wallace, 127 Nev. at , 262
                P.3d at 1140 (explaining that evidence extrinsic to the issue of immediate
                possession cannot be introduced at trial). Typically, the issues are
                whether the plaintiff gave the statutorily required notice, Davidsohn v.
                Doyle, 108 Nev. 145, 150, 825 P.2d 1227, 1230 (1992), and who as between
                the plaintiff and the defendant has a superior right to possession. NRS

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(holding that unlawful detainer does not adjudicate title or an absolute
right to possession of property because It he object of the [unlawful
detainer] statute was not to try titles, but to preserve the peace and
prevent violence"); Seitz, 2012 WL 5523078, at *7 (unlawful detainer
action limits court to determining possession between plaintiff and
defendant). Notably, a superior right to possession does not require proof
of title, although title can be evidence of the right to possession.        Yori v.
Phenix, 38 Nev. 277, 282, 149 P. 180, 180-81 (1915) NIA has universally
been held that title to property cannot be an issue in such actions. . . even
though such pleading and proof may incidentally involve the question of
title."). If after a trial, the court determines that the occupant has no legal
defense to the alleged unlawful detainer, it will issue a summary order for
restitution of the premises. NRS 40.360(1).
             Although possession of property differs from ownership of
property, possession is nonetheless a type of property interest.         Loretto v.
Teleprompter Manhattan CATV Corp., 458 U.S. 419, 435 (1982) ("Property
rights in a physical thing have been described as the rights 'to possess, use
and dispose of it.' (quoting United States v. General Motors Corp., 323
U.S. 373, 378 (1945))); Seitz,         2012 WL 5523078, at *5. In his
Commentaries on the Laws of England, Blackstone instructed that "there
are four 'degrees' of title: (1) 'naked possession,' (2) 'right of possession,' (3)
'mere right of property,' and (4) 'complete title.' Seitz, 2012 WL 5523078,
at *5 (quoting 2 William Blackstone, Commentaries *195-99). Unlawful
detainer actions fall into the second "degree" of title in a property, "right of
possession," and accordingly, are actions that affect interests in a thing—
real property. As such, unlawful detainer is in rem or quasi in rem.            See
G.C. Wallace, 127 Nev. at , 262 P.3d at 1140-41 (explaining in the

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                analogous summary eviction setting that the key elements and defenses of
                unlawful detainer center on possession and property rights, rather than
                personal rights or obligations.); Seitz, 2012 WL 5523078, at *8; see also
                Hepburn & Dundas' Heirs v. Dunlop & Co., 14 U.S. 179, 203 n.d (1816)
                (describing ejectment as a proceeding in rem); Scherbenske v. Wachovia
                Mortg., FSB, 626 F. Supp. 2d 1052, 1057 (E.D. Cal. 2009) (holding that the
                unlawful detainer action plaintiff sought to enjoin was a quasi-in-rem
                action).
                              Thus, in response to the Ninth Circuit's questions, we answer
                that quiet title and unlawful detainer proceedings pertain to interests in a
                thing and are, thus, "in rem" or "quasi in rem" in nature. We decline the
                parties' invitation to expound on the federal prior-exclusive-jurisdiction
                doctrine, as those questions were not certified to us and are best left to the
                court of origin.

                                                                                     ,   C.J.

                                                                        J2e,oft__\       '   J.
                Gibbons                                     Hardesty

                Parraguirre

                Cherry

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