Court Opinion

ID: 9957512
Source: CourtListenerOpinion
Date Created: 2024-04-04 16:10:34.924364+00
Date Added: 2024-06-11T08:18:22.996185
License: Public Domain

140 Nev., Advance Opinion c()
                       IN THE SUPREME COURT OF THE STATE OF NEVADA

                LANCE POSNER; AND EVA POSNER,                          No. 85860
                Appellants,
                vs.
                U.S. BANK NATIONAL ASSOCIATION,
                AS TRUSTEE FOR MASTR ASSET
                BACKED SECURITIES TRUST 2006-
                HE1, MORTGAGE PASS THROUGH
                CERTIFICATES, SERIES 2006-HE1,                             APR 04 20
                AND QUALITY LOAN SERVICE                                 ELI
                                                                      CLE                  URT
                CORPORATION, A FOREIGN                                BY
                                                                            IEF DEPUTY CLERK
                CORPORATION,
                Respondents.

                            Appeal from a district court order denying a motion for a
                preliminary injunction in an action to quiet title. Eighth Judicial District
                Court, Clark County; Carolyn Ellsworth, Senior Judge.
                            Affirmed.

                Robert W. Lueck, Ltd., and Robert W. Lueck, Las Vegas,
                for Appellants.

                Wright, Finlay & Zak, LLP, and Christina V. Miller and Robert A. Riether,
                Las Vegas,
                for Respondent U.S. Bank National Association.

                BEFORE THE SUPREME COURT, STIGLICH, LEE, and BELL, JJ.

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                                                        OPINION

                       By the Court, LEE, J.:
                                     NRS 106.240 provides that certain liens on real property are
                       automatically cleared from the public records after a specified period of
                       time. More precisely, the statute provides that a lien that is created by a
                       mortgage or deed of trust on real property is conclusively presumed to be
                       discharged "10 years after the debt secured by the mortgage or deed of trust
                       according to the terms thereof or any recorded written extension thereof
                       become wholly due."
                                     We recently held in LV Debt Collect, LLC v. Bank of New York
                       Mellon, 139 Nev., Adv. Op. 25, 534 P.3d 693 (2023), that recording a notice
                       of default to institute nonjudicial foreclosure proceedings does not trigger
                       NRS 106.240's 10-year time frame. In this opinion, and for reasons similar
                       to those in LV Debt Collect, we clarify that instituting judicial foreclosure

                       proceedings likewise does not trigger the 10-year time frame. We therefore
                       affirm the district court's order denying appellants' motion for a preliminary
                       injunction.
                                         FACTS AND PROCEDURAL HISTORY
                                     In 2005, appellants Lance and Eva Posner purchased the
                       subject property. The sellers had an outstanding loan that was secured by
                       a deed of trust on the property. The Posners assumed responsibility for the
                       loan, and the deed of trust was eventually assigned to respondent U.S.
                       Bank. In September 2012, U.S. Bank filed a judicial foreclosure action
                       against the Posners.     U.S. Bank's complaint alleged that "[t]he amount
                       owing under the Note has become accelerated in accordance with the terms
                       of the Note and Deed of Trust" and that "there remains due and owing under
                       the Note the approximate principal amount of 937,000.00." U.S. Bank did

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                not pursue the judicial foreclosure, and in July 2013, it voluntarily
                dismissed its lawsuit without prejudice.1

                             The Posners remained in default on the loan through 2019, at
                which point they filed an action in federal district court. In that case, the
                Posners alleged that a fraudulent deed of trust assignment from 2012

                deprived U.S. Bank of the right to foreclose on their property. The federal
                district court granted U.S. Bank's motion to dismiss that action with
                prejudice in 2020.
                             Thereafter, the Posners filed the underlying state-court action
                in 2022. Their complaint asserted a claim for quiet title, alleging that the
                10-year period in NRS 106.240 was triggered in 2012 when U.S. Bank filed
                its judicial foreclosure action, such that by 2022, the deed of trust had been
                extinguished as a matter of law.2         The Posners sought a preliminary
                injunction to prevent U.S. Bank's scheduled nonjudicial foreclosure sale.
                The district court denied the request for an injunction, finding the Posners'
                claims had no likelihood of success. The Posners now appeal.

                      1The   record reflects that respondent Quality Loan Service
                Corporation is U.S. Bank's foreclosure trustee. Although named as a
                defendant in the underlying matter and a respondent in this appeal, Quality
                Loan Service has not filed a brief in this matter.

                      2 The Posners also asserted a claim for fraud, alleging that the 2012

                deed of trust assignment to U.S. Bank was either fraudulent or improperly
                notarized. The district court found that this claim was barred by issue and
                claim preclusion based on the Posners' 2019 federal lawsuit. To the extent
                the Posners challenge this finding on appeal, we are not persuaded that any
                exception to issue preclusion applies.       Cf. Restatement (Second) of
                Judgments § 28 (Am. L. Inst. 1982) (listing scenarios when issue preclusion
                should not apply even though an issue was actually and necessarily
                litigated).
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                                                        DISCUSSION
                                    We typically review a district court's denial of a preliminary
                        injunction for an abuse of discretion.     Excellence Crnty. Mgrnt., LLC v.
                        Gilrnore, 131 Nev. 347, 351, 351 P.3d 720, 722 (2015). But where, as here,

                        the denial of injunctive relief presents a purely legal issue, our review is de
                        novo. Sowers v. Forest Hills Subdiv., 129 Nev. 99, 108, 294 P.3d 427, 433
                        (2013). "A preliminary injunction is proper where the moving party can
                        demonstrate that it has a reasonable likelihood of success on the merits and

                        that, absent a preliminary injunction, it will suffer irreparable harm for
                        which compensatory damages would not suffice." Excellence Crnty. Mgrnt.,
                        131 Nev. at 350-51, 351 P.3d at 722. Here, we focus solely on the Posners'
                        likelihood of success on the merits of their quiet title claim because that was
                        the primary basis for the district court's decision.3
                                    In denying the preliminary injunction, the district court relied
                        on NRS 107.550(3), which provides that if a deed of trust beneficiary's
                        judicial foreclosure claim is dismissed without prejudice, the "beneficiary of
                        the deed of trust is thereupon restored to its former position and has the
                        same rights as though an action for a judicial foreclosure had not been
                        commenced." The Posners contend that the district court erred in relying
                        on NRS 107.550 because that statute only applies to judicial foreclosure
                        actions commenced on or after October 1, 2013. See 2013 Nev. Stat., ch.
                        403, § 30, at 2202. We agree that the district court's reliance on that statute
                        is questionable, as U.S. Bank commenced its judicial foreclosure action in

                              3 To the extent that any of the other preliminary-injunction factors
                        may weigh in favor of the Posners, we conclude that the district court was
                        within its discretion in finding that those factors did not outweigh the
                        district court's finding that the Posners had no likelihood of success on the
                        merits of their quiet title claim.
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                September 2012. Nevertheless, we conclude that the district court reached
                the correct result in concluding that the Posners had no likelihood of success
                on their quiet title claim. See Saavedra-Sandoval v. Wal-Mart Stores, Inc.,
                126 Nev. 592, 599, 245 P.3d 1198, 1202 (2010) (recognizing that this court
                will affirm the district court's ruling if it reached the right result for the
                wrong reason).
                            The quiet title claim is premised on the idea that the 10-year
                period in NRS 106.240 had been triggered in 2012, and thus the lien on the
                subject property was discharged as a matter of law in 2022. That premise
                is wrong. In its entirety, NRS 106.240 provides,
                            The lien heretofore or hereafter created of any
                            mortgage or deed of trust upon any real property,
                            appearing of record, and not otherwise satisfied and
                            discharged of record, shall at the expiration of 10
                            years after the debt secured by the mortgage or deed
                            of trust according to the terms thereof or any
                            recorded written extension thereof become wholly
                            due, terminate, and it shall be conclusively
                            presumed that the debt has been regularly satisfied
                            and the lien discharged.
                (Emphasis added.) As we recognized in LV Debt Collect, the statute plainly
                states that a debt "become[s] wholly due" only "according to" either of two
                things: (1) the "terms thereof," referring to the mortgage or deed of trust, or
                (2) "any recorded written extension thereof." 139 Nev., Adv. Op. 25, 534
                P.3d at 697 (quoting NRS 106.240).        Thus, when there is no recorded
                extension of the due date, the terms of the mortgage or deed of trust dictate
                when the debt becomes wholly due. Id. ("[W]hen a statute's language is
                plain and its meaning clear, the court will apply that plain language."
                (quoting Leven v. Frey, 123 Nev. 399, 403, 168 P.3d 712, 715 (2007))). Here,

                the deed of trust does not mention judicial foreclosure actions, much less
                state that the institution of such an action makes the loan "wholly due" for
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                 purposes of NRS 106.240.      Thus, despite the language in U.S. Bank's
                 judicial foreclosure complaint that could be construed as accelerating the
                 Posners' loan, U.S. Bank's judicial foreclosure action was insufficient to
                 trigger NRS 106.240's 10-year time frarne. This conclusion is consistent
                 with the policy considerations set forth in LV Debt Collect, in that applying
                 NRS 106.240 to security interests that are the subject of pending litigation
                 would be "incongruous with the statute's purpose" and would encourage
                 property owners to "engage in run-out-the-clock gamesmanship" by
                 prolonging a judicial foreclosure action until NRS 106.240's 10-year period
                 expires. 139 Nev., Adv. Op. 25, 534 P.3d at 698-99.
                                               CONCLUSION
                              Because the judicial foreclosure action did not trigger the 10-
                 year time frame in NRS 106.240, the district court reached the correct result
                 when it determined that the Posners' quiet title claim had no likelihood of
                 success on the merits. We therefore affirm the district court's order denying
                 the Posners' motion for a preliminary injunction.

                                                                                            J.
                                                            Lee

                 We concur:

                        Aii4CAA--0               J.
                 Stiglich

                                                J.
                 Bell

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