Court Opinion

ID: 7801753
Source: CourtListenerOpinion
Date Created: 2022-08-18 17:08:31.618792+00
Date Added: 2024-06-11T16:29:20.551762
License: Public Domain

138 Nev., Advance Opinion         51
                       IN THE SUPREME COURT OF THE STATE OF NEVADA

                FEDERAL NATIONAL MORTGAGE                           No. 82174
                ASSOCIATION; AND GRANDBRIDGE
                REAL ESTATE CAPITAL, LLC,
                Appellants,
                vs.
                WESTLAND LIBERTY VILLAGE, LLC,                                   LE
                A NEVADA LIMITED LIABILITY
                                                                         AUG 11 2022
                COMPANY; AND WESTLAND
                                                                        EL.         ABRO
                VILLAGE SQUARE, LLC, A NEVADA                                     UP ME COU

                LIMITED LIABILITY COMPANY,                         BY
                                                                              EF DEPUTY CLERK
                Respondents.

                           Appeal from a district court order granting a preliminary
                injunction and denying appointment of a receiver in a dispute concerning
                real property loan agreements.    Eighth Judicial District Court, Clark
                County; Kerry Louise Earley, Judge.
                           Reversed and remanded.

                Snell & Wilmer LLP and Kelly H. Dove, Nathan G. Kanute, and Bob L.
                Olson, Las Vegas,
                for Appellant Federal National Mortgage Association.

                Holland & Hart LLP and Joseph G. Went, Lars K. Evensen, and Sydney R.
                Gambee, Las Vegas,
                for Appellant Grandbridge Real Estate Capital, LLC.

                Campbell & Williams and J. Colby Williams and Philip R. Erwin, Las
                Vegas; Law Offices of John Benedict and John Benedict, Las Vegas; and
                Westland Real Estate Group and John W. Hofsaess, Long Beach, California,
                for Respondents.

SUPREME COURT
     OF
   NEVADA

io) 1q47A
                                                                                    -       zr
                        Fennemore Craig, P.C., and Leslie Bryan Hart and John D. Tennert, Reno,
                        for Amicus Curiae Federal Housing Finance Agency.

                        BEFORE THE SUPREME COURT, EN BANC.

                                                         OPINION

                        By the Court, STIGLICH, J.:
                                    This appeal permits us to clarify when a lender or its assignee
                        is entitled to the appointment of a receiver after a borrower defaults on a
                        real property loan agreement. The borrower here owns properties housing
                        multi-family apartment complexes, and the lender observed a significant
                        decrease in occupancy after the borrower assumed ownership. The lender's
                        inspector observed that significant repairs were needed, and the lender
                        demanded deposits into repair and replacement escrow accounts, relying on
                        specific provisions in the loan agreements. The borrower did not make the
                        demanded deposits, which the lender deemed a default under the loan
                        agreements.    The lender sued and sought a receiver.        The borrower
                        countersued, alleging breach of contract and seeking a preliminary
                        injunction. The district court found that there was no default and issued a
                        wide-ranging preliminary injunction, reaching matters that had been
                        neither briefed nor argued.
                                    We have not previously had cause to interpret NRS 32.260(2)(b)
                        and NRS 107A.260(1)(a)(1), which provide that a lender is entitled to the
                        appointment of a receiver when the borrower agrees to such in the event of
                        a default and, after a default, the lender seeks a receiver in enforcing the
                        loan, NRS 32.260(2), or the property is subject to the assignment of rents,

SUPREME COURT
         OF
      NEVADA
                                                             2
(0) 1947r\ ."?.
             .-4/.
                ..%).
                NRS 107A.260(1). As the lender has an entitlement to a receiver in such
                instances, appointment of a receiver is not subject to the district court's
                discretion. The agreement itself may state what circumstances constitute
                a default.
                             The district court here erred in disregarding the loan
                agreements' provisions setting forth what constituted a default. The loan
                agreements contain clear terms setting forth the parties' obligations and
                what constitutes default. The borrower here failed to perform several duties
                mandated under the loan agreements, including the duty to make the
                demanded deposits, and this failure constituted default. As the borrower
                agreed to the provisions in the loan documents stating that the lender may
                obtain a receiver in the event of default, the lender was entitled to the
                appointment of a receiver on the borrower's default, and the district court
                abused its discretion in refusing to appoint one. The district court further
                abused its discretion in issuing a preliminary injunction because it rested
                its order on clearly erroneous factual determinations, did not apply the
                relevant standards for injunctive relief, and failed to recognize the lender's
                entitlement to a receiver. We accordingly reverse and remand.'
                                  FACTS AND PROCEDURAL HISTORY
                             This appeal involves a dispute concerning mortgage loans
                entered into to finance the purchase of two properties housing multi-family
                apartment complexes. Appellant Federal National Mortgage Association
                (Fannie Mae) is the successor-in-interest to the original lender for the loan
                agreements; appellant Grandbridge Real Estate Capital, LLC, is its loan
                servicer.    Respondents Westland Liberty Village, LLC, and Westland

                       'Pursuant to NRAP 34(f)(1), we have determined that oral argument
                is not warranted in this appeal.
SUPREME COURT
        OF
     NEVADA
                                                      3
(0) I947A
                Village Square, LLC (collectively, Westland) are the successors-in-interest
                to the original borrowers.      The predecessor borrowers executed a loan
                agreement for approximately $9.4 million to finance the purchase of a
                property known as "Village Square Apartments."             The predecessor
                borrowers executed another mortgage loan agreement for $29 million to
                purchase "Liberty Village Apartments." The predecessor lender held a note
                and deed of trust on each property (loan documents). The agreements have
                materially equivalent operative provisions.        The predecessor lender
                assigned both Village Square and Liberty Village loan documents to Fannie
                Mae. Westland executed assumption and release agreements to take on the
                Village Square and Liberty Village loan obligations, including payment and
                performance obligations, from the original borrowers and guarantors. In
                doing so, Westland expressly adopted all of the terms and obligations of the
                loan documents and associated instruments.
                            Compliance with the provisions of these agreements is at the
                essence of this dispute. The loan agreements provide that the borrower
                shall pay the expenses to maintain and repair the property (§ 6.02(b)). The
                borrower must permit the lender or its agent to inspect the property, subject
                to routine constraints, such as business hours (§ 6.02(d)). If, in connection
                with an inspection, the lender determines that the property has
                deteriorated beyond that of ordinary wear and tear, the lender may obtain
                a property condition assessment (PCA) at the borrower's expense (§ 6.03(c)).
                The lender may require additional lender repairs or replacements on the
                basis of the PCA (§ 6.03(c)).
                Additional repairs and deposits
                            With timely written notice, the lender may require the borrower
                to make an additional deposit to the replacement reserve account or the

SUPREME COURT
     OF
   NEVADA
                                                      4
                repairs escrow account "if Lender determines that the amounts on deposit
                in either [account] are . . . not sufficient to cover the costs for . . . Additional
                Lender Repairs... or Additional Lender Replacements," pursuant to
                section 13.02(a)(9) (§ 13.02(a)(4)). Section 13.02(a)(9) provides that the
                lender may require the borrower to make additional lender repairs or
                replacements and provides general terms for the lender to disburse from the
                reserve or escrow accounts to pay for those repairs when all other conditions
                are met (§ 13.02(a)(9)(B)). It further provides that "[n]othing in this Loan
                Agreement shall limit Lender's right to require an additional deposit to the
                [reserve or escrow accountsl" or to require additional monthly deposits for
                additional lender repairs or replacements. The borrower may contest any
                demanded deposit's amount or validity by the appropriate legal process,
                though the lender may require the borrower to deposit the contested
                sum (§ 12.02(e)). Whether additional deposits or repairs are warranted
                generally falls within the lender's discretion throughout the agreement.
                Defaults
                             The loan agreements set forth numerous automatic default
                events, including any failure by the borrower to deposit any amount
                required by the agreement (§ 14.01(a)(1)). In the event of a default, the
                lender has the option to accelerate the loan and demand payment of all the
                remaining unpaid balance and any other money due; it may also
                foreclose (§ 14.02(a)). The lender need not disburse payments for repairs or
                replacements from the reserve or escrow accounts if there is a default
                (§§ 13.02(a), 14.02(b)).
                             Pursuant to the deed of trust, the borrower agrees to assign all
                rents to the lender. In the event of a default, the lender may request the
                court to appoint a receiver. If the lender chooses to seek a receiver, the

SUPREME COURT
       OF
     NEVADA
                                                         5
40) I047A
                      borrower expressly consents to the appointment of a receiver. The original
                      borrowers signed each deed of trust in executing it, and Westland expressly
                      assumed all of the terms of the collected loan documents.
                                  After Westland began operating the apartment complexes,
                      Fannie Mae observed a substantial decrease in occupancy rates and became
                      concerned that this decline resulted from deterioration in the condition of
                      the properties. Fannie Mae inspected the properties' condition and then
                      retained a third-party inspector to produce a PCA, documenting the repairs
                      needed, for each property.   The inspector examined the properties and
                      concluded that Village Square was in substandard condition, Liberty
                      Village was in fair to poor condition, and they required approximately $1.09
                      million and $1.75 million, respectively, in repairs and replacements.
                                  Fannie Mae's agent sent Westland notices of demand for each
                      property, requiring Westland to deposit an aggregate sum of approximately
                      $2.8 million in the repairs escrow accounts. The notices also increased
                      monthly deposits to the repairs escrow accounts by $9,557.        Westland
                      responded that there was no basis to demand the deposit, there was no
                      failure to maintain because the properties were dilapidated when they were
                      acquired, the repairs requested improperly constituted ordinary wear and
                      tear repairs, and Fannie Mae had• no right to conduct a PCA. Fannie Mae
                      filed and served notices of default based on Westland's purported failures
                      to maintain the properties and to make the required account deposits.
                                  Fannie Mae petitioned the district court for the appointment of
                      a receiver. In response, Westland moved for a preliminary injunction to
                      enjoin any foreclosure proceedings, opposed the appointment of a receiver,
                      and asserted counterclaims, alleging Fannie Mae breached the loan

SUPREME COURT
        OF
     NEVADA
                                                           6
(0) 1947A    4get9.
                agreement.     Westland named Grandbridge as a third-party defendant,
                asserting claims against it as Fannie Mae's agent.
                              The district court held a hearing and expressed doubt that
                Westland defaulted because Fannie Mae did not show that Westland ceased
                paying entirely. It found a factual dispute as to the alleged default and
                found that Westland would suffer irreparable harm in losing the properties
                by foreclosure.    It thus concluded that a preliminary injunction was
                warranted and that a receiver was not. The court enjoined Fannie Mae from
                acting to foreclose, interfering with Westland's operation of the properties,
                appointing a receiver, possessing the property, enforcing a judgment or
                security interest against the properties without court approval, or taking
                any adverse action against any Westland-affiliated corporate entity with
                respect to any other loans. The court further required that Fannie Mae turn
                over the monthly debt service invoices, disburse any funds paid in excess of
                the monthly debt service obligations, disburse any excess funds Fannie Mae
                held in a repairs account, pay Westland the interest that would have been
                earned had certain monies been held in an interest-bearing account rather
                than one that did not, and timely respond to disbursement requests. And
                the court struck the notices of demand, notices of default, acceleration of the
                notes, and the demands and notices per NRS 107A.270.2

                      2This court stayed operation of provisions in the district court's order
                directing Fannie Mae to remove the notices of default and election to sell
                from the properties' titles, such that those notices remain of record, though
                we did not stay operation of the remaining provisions. Fed. Nat'l Mortg.
                Ass'n v. Westland Liberty Vill., LLC, Docket No. 82174, at *2 (Order
                Granting Stay in Part and Denying Stay in Part, Feb. 11, 2021) (staying
                paragraphs 2 and 3).
SUPREME COURT
         OF
      NEVADA
                                                      7
10) l'447A
                            Fannie Mae appealed. In addition to Fannie Mae's challenge,
                Grandbridge appealed, asserting that it should not be subject to the
                injunction because it did not timely become a party to the litigation. Federal
                Housing Finance Agency (FHFA), which serves as conservator for Fannie
                Mae, filed an amicus brief.
                                               DISCUSSION
                            We review for an abuse of discretion a district court's decisions
                whether to appoint a receiver, Med. Device All., Inc. v. Ahr, 116 Nev. 851,
                862, 8 P.3d 135, 142 (2000), abrogated on other grounds by Costello v. Casler,
                127 Nev. 436, 440 n.4, 254 P.3d 631, 634 n.4 (2011), or to grant a
                preliminary injunction, Shores v. Glob. Experience Specialists, Inc., 134
                Nev. 503, 505, 422 P.3d 1238, 1241 (2018). "An abuse of discretion can occur
                when the district court bases its decision on a clearly erroneous factual
                determination or disregards controlling law." Las Vegas Metro. Police Dep't
                v. Blackjack Bonding, Inc., 131 Nev. 80, 89, 343 P.3d 608, 614 (2015).
                The district court erred in finding Westland did not default
                            Fannie Mae argues that the district court clearly erred when it
                found a dispute as to Westland's default. It argues that Westland defaulted
                by triggering certain events specified in the contract as constituting default,
                including failing to provide additional deposits requested into the repairs
                escrow account, failing to rnaintain the properties, and failing to permit
                Fannie Mae to inspect the properties. Westland concedes that it did not
                make the requested deposits but argues that this was not a default because
                Fannie Mae was not permitted to unilaterally demand additional deposits.
                Westland argues that there was "no monetary default" because it was
                current on its monthly payments.

SUPREME COURT
       OF
     NEVADA
                                                      8
MI 1 ,47A
                            We interpret unambiguous contracts according to the plain
                language of their written terms. Canfora v. Coast Hotels & Casinos, Inc.,
                121 Nev. 771, 776, 121 P.3d 599, 603 (2005). Contracts rnust be read as a
                whole without negating any term. Rd. & Highway Builders, LLC v. N. Nev.
                Rebar, Inc., 128 Nev. 384, 390, 284 P.3d 377, 380 (2012). And courts will
                look to an agreement's terms to determine what events constitute a default.
                See Squyres v. Zions First Nat'l Bank, 95 Nev. 375, 377, 594 P.2d 1150, 1152
                (1979); see also 68A Am. Jur. 2d Secured Transactions § 426 (2014) ("[T]he
                security agreement itself must define the standards for determining
                whether a default occurs, and any breach by the debtor of the terms of the
                security agreement constitutes a default, entitling the secured party to any
                available remedies therefor . . . ." (footnotes omitted)). We review contracts
                de novo, May v. Anderson, 121 Nev. 668, 672, 119 P.3d 1254, 1257 (2005),
                but we defer to the district court's factual findings and will not set them
                aside unless they are clearly erroneous or not supported by substantial
                evidence, Sowers v. Forest Hills Subdivision, 129 Nev. 99, 105, 294 P.3d
                427, 432 (2013).
                            During its hearing on the competing claims for relief, the
                district court focused on whether Westland was making monthly payments
                to the escrow accounts to any extent, finding a factual dispute as to default
                for this reason. The court found that Westland submitted documentation
                showing no deterioration and that Fannie Mae was required to show
                deterioration before Westland could default. It thus found "substantial
                factual disputes" regarding default.
                            The district court clearly erred in finding that Westland did not
                default because it disregarded the provisions of the loan agreement. Section
                6.03(c) of the loan agreement permits Fannie Mae to order a PCA after

SUPREME COURT
         OF
      NEVADA
                                                       9
(c   I 947A
                inspecting the properties and to require additional lender repairs or
                replacements on this basis. If Fannie Mae concludes that existing amounts
                on deposit in the corresponding reserve or escrow accounts are inadequate,
                it may require additional deposits under section 13.02(a)(4).      The loan
                agreement leaves these determinations to Fannie Mae's discretion, and
                section 13.02(a)(9) further provides that nothing in the agreement limits
                Fannie Mae's right to require additional deposits. Westland may dispute a
                required repair or deposit, but section 12.03(e) requires that Westland use
                the appropriate legal process and permits Fannie Mae to demand that
                Westland deposit the contested amount.       If Westland fails to pay any
                required amount, that is a default under section 14.01(a)(1). Fannie Mae
                would then have the rights to accelerate the loan and foreclose under section
                14.02(a).
                             Here, Fannie Mae inspected the property in connection with a
                decline in occupancy and obtained a PCA.         The PCA concluded that
                extensive repairs were required, and Fannie Mae accordingly demanded
                that Westland deposit an amount to pay for the expected costs of the repairs.
                Westland did not deposit this amount or challenge the demand through the
                procedures set forth in the agreement—facts that it concedes—and thus
                defaulted.   The loan agreement does not contain any term supporting
                Westland's contention that it could only default by failing to make its
                monthly payments. Westland's counterclaims do not constitute a proper
                way to dispute Fannie Mae's demand. And evidence showing that Westland
                conducted certain repairs does not cure the default under the terms of the
                loan agreement. The district court clearly erred in ruling otherwise and in
                looking solely to Westland's monthly payments without considering Fannie
                Mae's entitlement to demand additional deposits.

SUPREME COURT
        OF
     NEVADA
                                                     10
10) 1947A
                The district court abused its discretion in failing to appoint a receiver
                            Fannie Mae thus argues that the district court abused its
                discretion in denying its application for a receiver because it disregarded
                Westland's obligations under the loan agreement in finding that Westland
                did not default. Relying on NRS 32.260, Fannie Mae subsequently argues
                that a receiver was warranted because Westland agreed in the deed of trust
                to the appointment of a receiver on default and the properties were subject
                to waste and dissipation.3     And relying on NRS 107A.260, Fannie Mae
                argues that it was entitled to a receiver because the properties were subject
                to the assignment of rents and the same agreement in the deed of trust to a
                receiver. Westland argues that no receiver was warranted because the
                district court found that the properties had not deteriorated. We agree with
                Fannie Mae.
                            This appeal presents the first opportunity this court has had to
                interpret NRS 32.260 and NRS 107A.260. Statutory interpretation is a
                question of law that we review de novo. Leven v. Frey, 123 Nev. 399, 402,
                168 P.3d 712, 714 (2007). "Generally, when a statute's language is plain
                and its meaning clear, the courts will apply that plain language." Id. at 403,
                168 P.3d at 715.
                            Nevada enacted NRS 32.260 in adopting the Uniform
                Commercial Real Estate Receivership Act and NRS 107A.260 in adopting
                the Uniform Assignment of Rents Act. NRS 32.100; NRS 107A.010. NRS
                32.260 provides for both the mandatory and the discretionary appointment

                      3Fannie   Mae also asserts without argument that NRS 107.100
                supports its entitlement to a receiver. We need not consider this assertion.
                See Edwards v. Emperor's Garden Rest., 122 Nev. 317, 330 n.38, 130 P.3d
                1280, 1288 n.38 (2006).
SUPREME COURT
        OF
     N EVADA
                                                      11
(0) I947A
                    of a receiver. NRS 32.260(1) states conditions when a receiver "may" be
                    appointed. This includes when a party with an apparent interest in the
                    property shows that the property is subject to or at risk "of waste, loss,
                    dissipation[J or impairment." NRS 32.260(1)(a)(1). In stating that the
                    district court "may" appoint a receiver, the statute provides the court
                    discretion whether to appoint a receiver in situations under NRS 32.260(1).
                    See Sengbusch v. Fuller, 103 Nev. 580, 582, 747 P.2d 240, 241 (1987) ("May'
                    is to be construed as permissive, unless the clear intent of the legislature is
                    to the contrary."); see also Unif. Commercial Real Estate Receivership Act
                    § 6 cmt. 1 (2015) (explaining that the draft language enacted in NRS
                    32.260(1) reflected the historical approach permitting a court to exercise its
                    discretion in settling whether a receiver was needed to preserve or
                    administer a property); cf. SFR Inus. Pool 1, LLC v. U.S. Bank, N.A., 130
                    Nev. 742, 744, 334 P.3d 408, 410 (2014) (looking to uniform law and its
                    commentary when interpreting a Nevada statute based on that uniform
                    law), holding modified on other grounds by Saticoy Bay LLC Series 350
                    Durango 104 v. Wells Fargo Home Mortg., 133 Nev. 28, 32, 388 P.3d 970,
                    974 (2017).
                                  NRS 32.260(2), meanwhile, provides that "a mortgagee is
                    entitled to appointment of a receiver" in connection with enforcing the
                    mortgage in certain instances, including when "Mlle mortgagor agreed in a
                    signed record to appointment of a receiver on default." NRS 32.260(2)(b).
                    In providing that "a mortgagee is entitled to appointment of a receiver," the
                    Legislature conferred a right to such mortgagees to demand that a court
                    appoint a receiver, instead of conferring a discretionary right on district
                    courts. See Unif. Commercial Real Estate Receivership Act § 6(b) (stating
                    alternative operative language for this provision for legislatures to enact,

SUPREME COURT
         OF
      NEVADA
                                                          12
1O   1P47A    40.
                     either "[a mortgagee is entitled to appointment off' or "[the court may
                     appoint] a receiver" (alterations in original)); id. cmt. 2 (discussing trend
                     towards holding appointment of a receiver to be mandatory where the loan
                     agreement contains a clause by which the mortgagor consented to
                     appointing a receiver); see also NRS 0.025(1)(a) (stating that, generally, "is
                     entitled' confers a private right"). NRS 107A.260(1)(a)(1) likewise provides
                     that the assignee of rents "is entitled to the appointment of a receiver for
                     the real property subject to the assignment of rents" when the assignor has
                     defaulted and agreed in a signed writing to appointing a receiver in the case
                     of default.4 Thus, when the requirements are met under these statutes, the
                     mortgagee/assignee is entitled to the appointment of a receiver as a matter
                     of right.
                                 We conclude the district court abused its discretion in denying
                     Fannie Mae's request for the appointment of a receiver. First, its decision
                     rested on the clearly erroneous finding that Westland had not defaulted. As
                     a result, the court did not appreciate that Fannie Mae was entitled to the
                     appointment of a receiver, as Westland expressly agreed to the appointment
                     of a receiver in the event of default and had defaulted and Fannie Mae
                     sought a receiver in connection with enforcing the loan agreement and for a
                     property subject to the assignment of rents.5    See NRS 32.260(2)(b); NRS

                           4We observe no meaningful distinction between the entitlements in
                     NRS 32.260(2) and NRS 107A.260(1) and clarify that being entitled to the
                     appointment of a receiver has the same meaning in each statute. Cf. Unif.
                     Commercial Real Estate Receivership Act § 6 cmt. 2 (observing that the
                     entitlement to a receiver in the uniform act enacted in NRS 32.260(2) tracks
                     the comparable provision in that enacted in NRS 107A.260(1)).

                           5Westland raises several additional unpersuasive arguments against
                     this conclusion. Its contention that Fannie Mae was only entitled to

SUPREME COURT
        OF
     NEVADA
                                                          13
(o) 1947A    API).
                107A.260(1)(a)(1).    Accordingly, we reverse the district court's order
                declining to appoint a receiver.

                demand additional deposits when the loan was issued or transferred fails
                because Westland addresses a provision permitting adjustments in those
                instances, section 13.02(a)(3), but disregards section 13.02(a)(4), which
                permits the lender to demand additional deposits if the lender determines
                the balances to be insufficient. Next, Westland argues that section
                13.02(a)(4) only permits increases for repairs of the types listed in the initial
                repair and replacement schedules and that those stated in the PCA exceed
                that limit. While this observation is accurate, the agreements set forth
                procedures by which Westland could challenge the propriety of Fannie
                Mae's demand, which Westland did not do. Further, it does not appear that
                any such challenge would have merit because the initial schedules and PCA
                cover similar types of repairs. We note that Westland did not make a
                specific argument regarding how the types of repairs and replacements in
                the initial schedules and the PCA were fundamentally dissimilar. Westland
                next argues that Fannie Mae was only permitted to obtain a PCA in
                response to deterioration occurring after the effective date of the loans,
                where Westland asserts that the damage or degradation observed predated
                the loans. Westland, however, assumed the representations in the loan
                agreement that the properties at the time the loans were entered were in
                good condition, were undamaged, and that any prior damage had been
                repaired (§ 9.01(b)(1)-(2)). Further, whether Fannie Mae concluded, in
                connection with an inspection, that the properties had deteriorated and
                warranted a PCA lies within Fannie Mae's discretion under section 6.03(c).
                Next, Westland argues that Fannie Mae was required to give it an
                opportunity to complete the identified repairs before demanding a deposit
                under sections 6.02(b)(3)(B) & (C). Westland is mistaken: those provisions
                require that it promptly commence work on any repairs Fannie Mae
                identified. Further, this claim misapprehends the nature of repairs under
                the agreement. As to repairs, the agreement provides that Westland must
                maintain adequate deposits in the escrow and reserve accounts, complete
                identified repairs and replacements, provide evidence of satisfactory
                completion, and then seek reimbursement by asking the servicer to disburse
                the appropriate amount from the appropriate account.

                       In sum, Westland has not shown that it was not in default or that the
                district court did not abuse its discretion.
SUPREME COURT
        OF
     NEVADA
                                                       14
401 1447A
                Preliminary injunction
                            To begin, the preliminary injunction is reversed because
                Westland's default entails that it was not likely to succeed on the merits.
                See Shores, 134 Nev. at 505, 422 P.3d at 1241 (requiring a movant to "show
                a likelihood of success on the merits of their case and that they will suffer
                irreparable harm without preliminary relief" to obtain a preliminary
                injunction and reversing a district court's decision to issue a preliminary
                injunction where it relied on a clearly erroneous factual finding).       We
                continue because the district court's order contains several deficiencies that
                warrant our attention.
                            An order granting an injunction must state why it issued, its
                specific terms, and the acts restrained or required in reasonable detail.
                NRCP 65(d)(1). When the district court here issued an injunction that
                ranged beyond the scope of the relief sought by Westland or briefed and
                argued by the parties, it violated this requirement by imposing vague and
                overbroad mandates. For instance, paragraph 4 enjoins Fannie Mae from
                "interfer[ing] with Westland's enjoyment of the Properties."       The order
                found that Fannie Mae inspected the properties, sent notices regarding its
                deposit demand, and pursued foreclosures. The order does not contain
                findings showing a reason for this injunction to issue, as there was no
                suggestion that Fannie Mae had interfered with Westland's enjoyment, and
                it does not state what is restrained in reasonable detail. Many other of the
                numerous specific injunctions within the district court's order have similar
                deficiencies, lacking specific findings to show a reason that they should
                issue or reasonable precision as to what specifically is mandated.        We
                caution district courts to exercise care in ensuring that injunctions provide

SUPREME COURT
      OF
   NEVADA
                                                     15
  I947A
                the requisite guidance to the enjoined party and do not exceed the scope of
                that required to serve the injunction's purpose.6
                                               CONCLUSION
                            We conclude that the district court erred in determining that
                Westland did not default and failing to apprehend Fannie Mae's entitlement
                to a receiver. The loan agreements define what constitutes a default, and
                under the agreements, Westland defaulted. The loan documents further
                provide that Westland agreed to the appointment of a receiver in the event
                of default. Fannie Mae relied on this agreement in seeking the appointment
                of a receiver after Westland defaulted. Under NRS 32.260(2)(b) and NRS
                107A.260(1)(a)(1), Fannie Mae was entitled to the appointment of a receiver
                in this instance. Accordingly, the district court abused its discretion in

                       6 Further, while lilt is common practice for Clark County district
                courts to direct the prevailing party to draft the court's order," King v. St.
                Clair, 134 Nev. 137, 142, 414 P.3d 314, 318 (2018), the court must "ensure
                that the proposed order drafted by the prevailing party accurately reflects
                the district court's findings," Byford v. State, 123 Nev. 67, 69, 156 P.3d 691,
                692 (2007). We urge prevailing parties to take appropriate care to submit
                suitable draft orders that accurately reflect the findings, Schoenberg v.
                Benner, 59 Cal. Rptr. 359, 363 (Ct. App. 1967), and district courts to
                scrutinize those draft orders, being mindful that they assume responsibility
                for those findings and attendant rulings upon entry of the order, Kamuchey
                v. Trzesniewski, 98 N.W.2d 403, 406-07 (Wis. 1959). This obligation
                warrants particular care where the opposing party objects that the draft
                order strays from the record.

                       In light of our disposition, we need not reach Grandbridge's argument
                that it received inadequate notice of Westland's request for a preliminary
                injunction or Fannie Mae's argument that the injunction was void ab initio
                for violating the anti-injunction clause of the Housing and Economic
                Recovery Act, 12 U.S.C. § 4617(f) (2018).
SUPREME COURT
       OF
    NEVADA
                                                      16
(U) I WA
                entering a preliminary injunction and denying the request for a receiver.
                We reverse and remand for further proceedings.

                                                                                  , J.
                                                        Stiglich

                W?-c7cur:

                                         ,
                Parraguirre                              Hardesty

                                             J.                                   , J.
                Cadish                                   Silver

                Pickering                                Herndon

SUPREME COURT
       OF
    NEVADA
                                                   17
101 947A