Court Opinion

ID: 8210171
Source: CourtListenerOpinion
Date Created: 2022-09-29 10:06:05.107919+00
Date Added: 2024-06-11T16:41:48.111919
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF NEVADA
                                                                              No. 81007
                       RALPH STEPHEN COPPOLA,
                       TRUSTEE OF THE .R.S. COPPOLA
                       musT DATED OCTOBER 19, 1995, AS                         Ft
                       MOST RECENTLY AMENDED ON
                       SEPTEMBER 13, 2001,                                     SEP 2 8 2022
                       Appellant,                                             ELIZA%W.TP E,P,OWN
                                                                            CLERK O   UREME COURT
                       vs.
                       WELLS FARGO BANK, N.A.,                                  F.;EPU   *LERK

                      li.e§22ndent,_
                          .

                                              ORDER OF AFFIRMANCE

                                  This is an appeal from a district court order denying appellant's
                      petition for judicial review, and granting respondent's request for
                      appropriate relief, in a foreclosure mediation matter.       Second Judicial
                      District Court, Washoe County; Kathleen M. Drakulich, Judge.
                                  Respondent Wells Fargo Bank, N.A., has been attempting to
                      foreclose on appellant Ralph Coppola's home for several years. The parties
                      have participated in multiple unsuccessful mediations through Nevada's
                      Foreclosure Mediation Program (FMP).         Following their most recent
                      medi.ation failure, Coppola argued that Wells Fargo had violated the FMP
                      rules (FMRs) and failed to participate in the mediation in good faith, such
                      that sanctions (includin.g setting aside the foreclosure action and a
                      declaration prohibitin.g any further foreclosure attempts until Coppola
                      "reaches age 62 1/2") were warranted. The mediator agreed that Wells
                      Fargo had failed to participate in good faith based on its failure to comply
                      with certain FMRs and thus declined to issue the IMP certificate that Wells
                      Fargo requireci to proceed to foreclosure. The mediator also declined to
                      recommend the specific sanctions Coppola sought.

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                et,
                            Coppola petitioned for judicial review, asking that the district
                court impose the additional sanctions the mediator did not recommend.
                Wells Fargo, in turn, argued it had followed the FMRs and participated in
                good faith, moving for appropriate relief in the form of the FMP certificate.
                The district court determined that Wells Fargo had complied with the FMRs
                and participated in good fa.ith, and denied Coppola's petition while granting
                Wells Fargo's motion. This appeal followed.
                            This court reviews the scope and meaning of the FMRs de novo.
                Pasillas v. HSBC Bank USA, 127 Nev. 462, 467, 255 P.3d 1.281, 1285 (2011).
                The question of an FMP party's good faith is one of fact that we review
                deferentially, Consol. Generator-Nev., Inc. v. Cummins Engine Co., Inc., 114
                Nev. 1304, 1312, 971 P.2d 1251., 1256 (1998) (noting that the question of
                good faith is one of fact), and to which a party's compliance with or violation
                of the FMRs can signal an answer, see Markowitz u. Saxon Special
                Servicing, 129 Nev. 660, 666, 310 P.3d 569, 572 (2013) (noting that
                "providing the appraisal is one indicator that the trust-deed beneficiary
                participated in the mediation in good faith"). Absent error in the district
                court's findings regarding a party's FMR compliance and good-faith
                participation, the district court's choice of sanction in an FMP proceeding is
                cornmitted to the district court's sound discretion. Edelstein v. Bank of N.Y.
                Mellon, 128 Nev. 505, 522, 286 P.3d 249. 260 (2012); Pasillas, 127 Nev. at
                469, 255 P.3d at 1286-87 (holding that the distria court's directing the
                program administrator to "enter a letter of certification and its failure to
                consider sanctions was an abuse of discretion because respondents clearly
                violated . . . the FMRs").
                            Coppola argues that Wells Fargo failed to act in good faith
                because the bank provided him with an oral short sale estimate rather than
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                one in writing. According to Coppola, FMR 13(10) mandates the latter. But
                this does not follow from FMR 13(10)'s text, which only provides that "Mlle
                beneficiary of the deed of trust or its representative . . . shall prepare an
                estimate of the 'short sale' value of the residence that it may be willing to
                consider as a part of the negotiation if loan modification is not agreed upon."
                (Emphasis added.) Cf. Nelson u. Eighth judicial .Dist. Court, 137 Nev. 139,
                141., 484 P.3d 270, 272 (2021) (noting that "rules of statutory construction

                apply to court rules" (alteration and internal quotation marks omitted)).
                True, if the beneficiary of a deed of trust prepares a short sale estimate,
                then writing would be the preferrable form (to avoid, for instance, as
                initially happened here, an argument over the precise amount)).            But
                neither the operative verb in FMR 13(10)—"prepare"—nor noun
                "estimate"—definitively allude to a written proposal. Estimate, Merriam-
                Webster's Collegiate Dictionary (11th ed. 2007) (defining "estimate" without
                reference to form, as "an opinion or judgment of the nature, character, or
                quality of a person or thing"); Prepare, id. (defining "prepare" as "to make
                ready beforehand for some purpose"). And as a general proposition, this
                court does not add requirements beyond those the text states. Cf. Antonin
                Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts
                93 (2012) (discussing the omitted-case canon).
                            Neither Coppola nor our independent research has highlighted
                any reason to read FMR 13(10) differently. Coast Hotels & Casinos, Inc. v.
                Nev. State Labor Cornin'n, 117 Nev. 835, 840, 34 P.3d 546, 550 (2001)

                      1Coppola initially disputed the amount of the short sale estimate
                given, but at oral argument before this court conceded it was $620,000,
                while what was due on the unpaid balance was more than $700,000.

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                (noting general rule that "when a statute is susceptible to but one natural
                or honest construction, that alone is the construction that can be given"
                (internal quotation marks omitted)); cf. .Edwards v. Emperor's Garden Rest.,
                122 Nev. 317, 330 n.38, 130 P.3d 1280, 1288 n.38 (2006) (noting that it is an

                appellant's responsibility to support their position with cogent argument
                and legal authority). Indeed, where the FMRs require a writing, they do so
                uxpressly. See, e.g., FMR 10(2) ("For any owner-occupied property located
                in Nevada where a Notice of Default is recorded and the homeowner has
                failed to file a Petition for Mediation Assistance within the time frame
                pursuant to Rule 8, the homeowner and beneficiary of the deed of trust may
                agree in writing to participate in the Foreclosure Mediation Program."
                (emphasis added)); FMR 16(1.) (requiring that a request for a continuance
                be "in writing"); FMR 18(1) (requiring that any temporary modification to
                the terms of the parties' loan agreement "be in writing"). Likewise, the
                FMRs do not include a short sale estimate as one of the enumerated
                "documents" that the beneficiary of the deed of trust must disclose at least
                ten days before the mediation. See FMR 13(7) (requiring the production of
                certain enumerated "documents," of which the short sale estimate is not
                one); cf. Document, Black's Law Dictionary (11th ed. 2019) (defining
                "document" as "[s]ornething tangible on which words, symbols, or marks are
                recorded"). Accordingly, the district court did not err by finding that Wells
                Fargo's oral offer satisfied any obligation it had to Coppola under FMR
                1.3(1.0).
                            Beyond this, Coppola suggests that it was bad faith for Wells
                Fargo to have obtained a second appraisal following the parties' stipulated
                continuance of the FMP process, which Wells Fargo provided to Coppola
                less than ten days prior to the continued mediation date. See FMR 13(7)(0

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                       (requiring that the beneficiary of the deed of trust supply an appraisal of
                       the property to be fOredosed "not more than 60 days old" at least 10 days
                       prior to the mediation).2 'Phis second appraisal considered the interior of
                       the home and resulted in a reduction of the estimated value of his property.
                       Despite that Wells Fargo did not provide Coppola with the second appraisal
                       in compliance with FMR 13(7)(f), Wells Fargo appears to have based its
                       ultimate short sale estimate on it. But Coppola himself requested this
                       second appraisal, and Wells Fargo's delay in disclosure resulted from
                       Coppola not having given the bank timely access to his home. In light of
                       these facts, we are not positioned to find that Wells Fargo violated FMR
                       13(7)(0 and acted in bad faith when the district court did not. Cf. Edelstein,
                       128 Nev. at 521-22, 286 P.3d at 260.
                                   Coppola also suggests that the amount of Wells Fargo's short-
                       sale estimate—which exceeded the value of Wells Fargo's appraisals, but
                       which, Coppola admitted at oral argument before this court, was less than
                       the amount Coppola then owed—means the bank participated in bad faith.
                       Well.s Fargo points to Shaw, wherein the United States Court of Appeals for
                       the Ninth Circuit defined a short sale as "a real estate transaction in which
                       the property serving as collateral for a mortgage is sold for less than the
                       outstanding balance on the secured loan, and the mortgage lender agrees to

                             2Coppola waived any argument on appeal that Wells Fargo's first
                       appraisal was either too ol.d or inaccurate under FMR 13(7). As noted, the
                       parties stipulated to a continuance of the mediation which specifically
                       provided that "[d]ue to the continuance, [Wells Fargo] is not required to
                       produce a new Broker's Price Opinion or Appraisal before the next hearing."
                       And the FMRs do not mandate that an appraisal assess the interior of a
                       property; what matters is that it "ensure that the fair market value of the
                       property is known to both parties to the mediation." Markowitz, 129 Nev.
                       at 666, 310 P.3d at 573.
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                discount the loan balance because of a consumer's economic distress." Shaw
                v. Experian Info. Sols., Inc., 891 F.3d 749, 752 (9th Cir. 2018) (emphasis
                added). And Coppola has not directed us to any caselaw or relevant
                authority that would. define a short sale as he suggests—based on the value
                of the property, rather than the amount owed. Edwards, 122 Nev. at 330
                n.38, 130 P.3d at 1288 n.38. Indeed, independent research suggests that
                courts generally define a short sale in the latter terms, in accord with Shctw.
                See, e.g., Baxter Dunaway, 6 The Law of Distressed Real Estate: Foreclosure
                Workouts Procedures § 65:15 (2022) (noting that in a short sale the
                deficiency judgment is the difkrence between the outstanding debt and the
                sales price).
                                Even setting aside the lack of support for Coppola's
                understanding of a short sale, Coppola admitted at oral argument that he
                would have rejected. one no matter the estimate amount. Instead, what
                Coppol.a wanted was a loan modification on more favorable terms. This
                negates Coppola's argument that to participate in the FMP in good faith
                'Wells Fargo had to provide hirn with a short sale estimate, differently
                calculated. The law does not require Wells Fargo to undertake a "vain and
                futile thing." 7510 Perla Del Mar Ave Tr. v. Bank of Am., N.A., 136 Nev. 62,
                66, 458 P.3d 348, 351 (2020) (citing, in the context of the futility excuse for
                superpriority tender requirements, Schmitt v. Sapp, 223 P.2d 403, 406-07
                (Ariz. 1950)).
                                We are also unpersuad.ed by the remainder of Coppola's
                arguments on appeal.      Coppola claims that the district court did not make
                find.ings as to whether Wells Fargo brought copies of the note, deed of trust,
                and assignments as required by NRS .1.07.086 and FMR 13(7)(a) and (b).
                But the district court's order actually states that Coppola's arguments on
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                this front are "unsupported by the record" and/or "unpersuasive," correctly,
                since the mediator's statement left unmarked the boxes that would identify
                those documents as missing.      As to Coppola's claim that Wells Fargo's
                representatives at the mediation lacked sufficient authority to participate
                in the FMP: Wells Fargo issued and provided a letter giving limited power
                of attorney to a law firm, Tiffany & .Bosco, which. provided written authority
                for attorney Stephen Wassner to appear as local counsel in FMP mediations;
                and Joshua Ring, a Wells Fargo underwriter, seems to have had authority
                to modify the terms of Coppola's 1.oan as well.        Cf. Amanda Martin,
                Litigating Consumer Protection Acts in the HA1VIP Context, 38 Seattle Univ.
                L. Rev. 739, 744 (201.5) (noting that, .in the HAMP context, a bank's
                underwriting department reviews loan modification applications).
                            Accordingly, the district court's findings of no FMR violations
                or bad faith on Wells Fargo's part are supported by the law and the record.
                The district court did not abuse its discretion by issuing the FMP certificate
                or denying the additional sanctions that Coppola requested. We therefore

                            ORDER the judgment of the district court AFFIRMED.

                                                    Silver

                                                                                    J.

                                                                                    J.

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                cc:   Hon. Kathleen M. Drakulich, .District Judge
                      Legal Aid Center of Southern Nevada, Inc.
                      Snell & Wilmer LLP/Salt Lake City
                      Snell & Wilmer, LLP/Tucson
                      Snell & Wilmer, LLP/Las Vegas
                      Washoe District Court Clerk

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