Court Opinion

ID: 1033051
Source: CourtListenerOpinion
Date Created: 2013-07-09 19:26:15.660979+00
Date Added: 2024-06-11T15:38:40.604504
License: Public Domain

The district court denied the appellants' petition and ordered
                that a foreclosure certificate be issued. We affirm.
                Standard of review
                              We review a district court's factual determinations
                deferentially. Ogawa v. Ogawa, 125 Nev. 660, 668, 221 P.3d 699, 704
                (2009) (a "district court's factual findings. . . are given deference and will
                be upheld if not clearly erroneous and if supported by substantial
                evidence"). Legal determinations are reviewed de novo. Clark County v.
                Sun State Properties, 119 Nev. 329, 334, 72 P.3d 954, 957 (2003). The
                choice of sanction in an FMP judicial review proceeding is committed to
                the sound discretion of the district court. Pasillas v. HSBC Bank USA,
                127 Nev. , 255 P.3d 1281, 1287 (2011).
                The district court did not abuse its discretion in ordering a foreclosure
                certificate to be issued

                              To obtain a foreclosure certificate, a deed of trust beneficiary
                must strictly comply with four requirements: (1) attend the mediation, (2)
                participate in good faith, (3) bring the required documents, and (4) if
                attending through a representative, the person present must have
                authority to modify the loan or have access to a person with such
                authority. NRS 107.086(4), (5); Leyva v. National Default Servicing Corp.,
                127 Nev.       , 255 P.3d 1275, 1279 (2011) (concluding that strict
                compliance with these requirements is necessary).
                              The Hoffmanns make three arguments on appea1. 3

                      3 TheHoffmanns make further arguments and assertions that are
                incoherent, ill-supported, or impertinent. Numerous portions of the briefs
                are either unsupported by citations to legal authority or devoid of
                explanation as to why the inclusions are relevant to the case presently
                before this court. See NRAP 28(e)(1), (j). Furthermore, a deposition
                                                                 continued on next page...
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                            First, the Hoffmanns contend that the assignment from First
                National Bank of Nevada to Wells Fargo was invalid because the
                assignment did not comply with NRS 111.210's requirement that contracts
                for the sale of land express in writing the consideration paid. Contrary to
                the Hoffmanns' argument, however, we note that NRS 111.205(1) is the
                applicable statute for assignments. Einhorn v. BAC Home Loans
                Servicing, 128 Nev.       , 290 P.3d 249, 252 (2012) (applying NRS
                111.205 to an assignment of a deed of trust). NRS 111.205(1) does not
                require an assignment of a deed of trust to include the consideration paid.
                Accordingly, the district court did not abuse its discretion in concluding
                that the assignment was valid.
                            Second, the Hoffmanns contend that Wells Fargo did not
                strictly comply with the document production requirement set forth in
                FMR 11(4), because the statement certifying the copy of the assignment
                does not include a recitation of the producing party's oath. FMR 11(4)
                states that "each assignment of the deed of trust . . . is only satisfied when

                ...continued
                transcript relied on by the Hoffmanns in support of one of their arguments
                is poorly reproduced to the point of illegibility, and the appendices do not
                include proper indices. See NRAP 30(b)(1), (c)(2). Thus, we conclude that
                any of the Hoffmanns' arguments not specifically discussed herein were
                improperly raised.

                       The poor quality of appellants' counsel's work product in the current
                case continues to obscure the impact and reliability of his arguments. See
                Volkes v. BAC Home Loans Servicing, L.P., Docket No. 57304 (Order of
                Affirmance, Feb. 24, 2012) (admonishing counsel for the poor quality of
                appellants' briefs). We strongly caution counsel to comply with the rules
                of this court in future filings. RPC 1.1, 1.3.

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                the mediator receives a statement under oath signed before a notary
                public pursuant to. . . NRS 240.1655(2)."
                            The statement certifying the copy of the assignment was
                notarized in Arizona. NRS 240.1655(3)(c) provides that a notarial act
                performed in another state is sufficient if it meets the requirements of
                NRS 240.1655(1) and (2) and is "in a form prescribed by the laws or
                regulations applicable in the place in which the notarial act was
                performed." The document in question, however, appears to only be an
                acknowledgment, and thus does not comply with the Arizona
                requirements for a proper jurat or oath. Compare A.R.S. § 41-311(1)
                (defining an acknowledgment) and A.R.S. § 41-311(5) (defining a jurat).
                Accordingly, the statement certifying the copy of the assignment does not
                strictly comply with FMR 11(4).
                            We have previously concluded that the note, deed of trust, and
                each assignment must be provided under the FMRs, Pasillas, 127 Nev. at
                , 255 P.3d at 1285, and have imposed a strict compliance standard for
                these core or "'essential documents,' Levva, 127 Nev. at , 255 P.3d at
                1277-79; see also NRS 107.086(4), (5) (requiring production of the note,
                deed of trust, and each assignment). However, this strict compliance
                requirement does not extend to non-essential or collateral documents. As
                we stated in Leyva, the purpose of the document production requirements
                is to ensure that the foreclosing party actually owns the note and has the
                authority to negotiate. 127 Nev. at , 255 P.3d at 1279. The Hoffmanns
                only argue that Wells Fargo failed to meet the technical requirements, and
                do not challenge the authenticity of the assignment itself. Thus, the
                defective certification does not affect its authority. Accordingly, the

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                district court did not abuse its discretion in concluding that Wells Fargo
                complied with FMR 11(4).
                           The Hoffmanns' final argument is that Wells Fargo
                participated in the mediation in bad faith by failing to disclose how much
                it paid First National Bank of Nevada for the loan. Specifically, the
                Hoffmanns contend that they needed this information so that they could
                determine whether they might be liable for a deficiency judgment. In
                making this contention, the Hoffmanns argue that NRS 40.451 limits any
                deficiency judgment to the amount Wells Fargo paid for the note. We
                disagree that potential deficiency exposure is controlled by the amount a
                loan was purchased for in the secondary mortgage market.
                           In its entirety, NRS 40.451 provides as follows:
                           As used in [this subchapter,] "indebtedness"
                           means the principal balance of the obligation
                           secured by a mortgage or other lien on real
                           property, together with all interest accrued and
                           unpaid prior to the time of foreclosure sale, all
                           costs and fees of such a sale, all advances made
                           with respect to the property by the beneficiary,
                           and all other amounts secured by the mortgage or
                           other lien on the real property in favor of the
                           person seeking the deficiency judgment. Such
                           amount constituting a lien is limited to the
                           amount of the consideration paid by the
                           lienholder.
                (Emphasis added).
                           With respect to this argument, the Hoffmanns attempt to
                equate "lien" with "debt." Regardless of what NRS 40.451 says about the

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                lienholder's lien, the statute does not affect the amount of debt the
                lienholder is entitled to collect. 4
                              The Hoffmanns' promissory note is a negotiable instrument
                and its transfer is governed by Article 3 of Nevada's UCC. Levva, 127
                Nev. at , 255 P.3d at 1279-81. Under Article 3, "[t]ransfer of an
                instrument, whether or not the transfer is a negotiation, vests in the
                transferee any right of the transferor to enforce the instrument." NRS
                104.3203(2). It is also a well-founded principle of contract law that
                Idenerally, all contract rights may be assigned. . . ." See, e.g., 29
                Richard A. Lord, Williston on Contracts § 74:10 (4th ed. 2003);
                Restatement (Second) of Contracts § 317(2) (1981). Further, "[i]t is no
                defense to an obligor that the assignee gave no consideration." 9 John E.
                Murray, Jr., Corbin on Contracts § 48.1 (rev. ed. 2007). In short, Wells
                Fargo is entitled to the same rights of collection of which the original
                holder was entitled. The Hoffmanns' proffered application of NRS 40.451
                appears to contradict not only Article 3, but also these basic contract
                principles. Additionally, we note that nothing within NRS 107.086 or the
                FMP rules requires a disclosure of the original amount paid, nor do these

                      4 The lack of attention by the Legislature to NRS 40.451 also
                contradicts the meaning that counsel ascribes to the statute. Enacted in
                 1969 in substantially its current form, NRS 40.451 was amended only once
                in 1989 without regard to the issue presented here. See 1969 Nev. Stat.,
                ch. 327, § 3, at 572-73; 1989 Nev. Stat. ch. 750, § 8, at 1769. It was not
                amended in 2009 in conjunction with the enactment of the FMP, when the
                Legislature amended NRS 40.455 to provide a limited and prospective
                prohibition on a deed of trust beneficiary's right to pursue a deficiency
                judgment. See 2009 Nev. Stat., ch. 310, §§ 2-3, at 1330-31.
                      In light of its 2009 actions, it is highly unlikely that the Legislature
                would completely ignore NRS 40.451's potential effect if the statute was
                intended to apply in a manner consistent with counsel's argument.

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                rules require a bank to disclose its intentions to seek or forego a deficiency
                judgment. NRS 107.086(4) and (5); Pasillas, 127 Nev. at , 255 P.3d at
                1287. Accordingly, Wells Fargo's nondisclosure of the consideration paid
                does not amount to bad faith.
                            Having determined that the district court did not abuse its
                discretion in ordering a foreclosure certificate to be issued, we
                            ORDER the judgment of the district court AFFIRMED.

                                                                                     J.
                                                    Hardesty

                                                    Parraguirre

                                                    Cherry

                cc:   Hon. Patrick Flanagan, District Judge
                      Mark L. Mausert
                      Tiffany & Bosco, P. A.
                      Washoe District Court Clerk

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