Court Opinion

ID: 4168201
Source: CourtListenerOpinion
Date Created: 2017-05-12 20:03:48.532979+00
Date Added: 2024-06-11T14:38:37.291902
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        MAY 12 2017
                                                                      MOLLY C. DWYER, CLERK
                                                                        U.S. COURT OF APPEALS
                            FOR THE NINTH CIRCUIT

EDWARD KARAYAN, Trustee of the                   No. 15-17008
Karayan Family Trust,

              Plaintiff - Appellant,             D.C. No. 2:13-cv-00472-APG-PAL

 v.
                                                 MEMORANDUM*
SUSAN MARDIAN; LEONARD
MARDIAN,

              Defendants - Appellees.

                    Appeal from the United States District Court
                             for the District of Nevada
                    Andrew P. Gordon, District Judge, Presiding

                              Submitted May 10, 2017**
                                Pasadena, California

Before: CLIFTON and FRIEDLAND, Circuit Judges and RICE,*** District Judge.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
        ***
             The Honorable Thomas O. Rice, Chief United States District Judge
for the Eastern District of Washington, sitting by designation.
      The district court had diversity jurisdiction, 28 U.S.C. § 1332, and we have

jurisdiction under 28 U.S.C. § 1291.

      This case arises out of a $4,000,000.00 loan secured by real property and

guaranteed by Defendants (Appellees) Susan and Leonard Mardian. The

guaranty agreements are governed by Nevada law and were entered into on

August 13, 2007. Plaintiff (Appellant) Edward Karayan, as trustee of the

Karayan Family Trust, owns a 20.925 percent interest in the Note and Deed of

Trust. See Complaint for Damages at ¶ 11. Plaintiff filed suit against Defendants

for an alleged default on the Note, seeking to recover personally against

Defendants without first foreclosing on the property. Defendants filed a motion

to dismiss and the district court granted the motion. The district court reasoned

that Plaintiff had to satisfy the Nevada “51 percent rule” under Nev. Rev. Stat. §

645B.340 before bringing suit. The district court alternatively reasoned that the

action was barred by the “one-action rule” under Nev. Rev. Stat. § 40.430, which

requires foreclosure on the real property before bringing suit on the debt. Both

grounds support the district court’s decision, although we need only address the

“one-action rule”.

      The one-action rule requires “an obligee, who seeks to recover a debt

secured by real property, to recover on the property through foreclosure before

attempting to recover from the loan’s guarantor personally.” Lavi v. Eighth Jud.
                                          -2-
Dist. Ct., 325 P.3d 1265, 1268 (Nev. 2014), superseded by statute on other

grounds as recognized by Bank of Nev. v. Petersen, 380 P.3d 854 (Nev. 2016).

The rule may be waived, but not if the mortgage or lien is “secured by real

property which is used primarily for the production of farm products as of the

date the mortgage or lien upon the real property is created.”1 Nev. Rev. Stat.

§ 40.495(5)(c).

      Karayan waived any challenge to the district court’s determination that the

one-action rule barred his suit by failing to raise the issue in his Opening Brief.

In any event, as the district court found, the real property at issue is farmland, so

the rule cannot be waived.2 See Eli Applebaum IRA v. Ariz. Acreage, LLC, 381

P.3d 609, 2012 WL 2367569 (Nev. 2012) (unpublished) (enforcing one-action

rule against same defendants despite purported waiver in guaranty based on farm-

products exception). This finding is supported by (1) the Declaration of Elno

      1
              The two other exceptions to the one-action rule do not apply here.
See Nev. Rev. Stat. § 118C.220 (proceeding concerning exclusion of tenant from
commercial premises), and Nev. Rev. Stat. § 40.512 (environmental impairment
of real collateral).
       2
              Appellant argues that the court found the one-action rule was waived
and did not rule on whether the property was actually utilized for the production
of farm products. Appellant Brief at 2. The excerpt from the record indicates
otherwise, as the district court stated: “I do think that the property – all the
evidence in the record, all everything that’s been presented to me is that the
property is farmland, or at least is used primarily for the production of farm
products and, so, under 40.495(5)(c), the One Action Rule could not be waived.”

                                           -3-
Roundy stating the land has been used only for grazing cattle since the late

1800’s and (2) the parcel tax information print off listing the property use as

ranch property. See also id. at *2-3 (holding that farm-products exception in

§ 40.495(5)(c) encompasses cattle grazing). Karayan has put forward no

evidence to rebut this evidence.

      Accordingly, the action was properly dismissed pursuant to Nev. Rev. Stat.

§ 40.435(2)(a).

      AFFIRMED.

                                          -4-